Sec. 3207. Under Secretary of Agriculture for Foreign Agricultural Services.

Title IV—Nutrition

Subtitle A—Supplemental nutrition assistance program

Sec. 4001. Preventing payment of cash to recipients of supplemental nutrition assistance for the return of empty bottles and cans used to contain food purchased with benefits provided under the program.

Sec. 12302. Program benefit eligibility status for participants in high plains water study.

Sec. 12303. Office of Tribal Relations.

Sec. 12304. Military Veterans Agricultural Liaison.

Sec. 12305. Prohibition on keeping GSA leased cars overnight.

Sec. 12306. Noninsured crop assistance program.

Sec. 12307. Ensuring high standards for agency use of scientific information.

2.

Definition of Secretary of Agriculture

In this Act, the term Secretary means the Secretary of Agriculture.

I

Commodities

A

Repeals and reforms

1101.

Repeal of direct payments

(a)

Repeal

Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8753) are repealed.

(b)

Continued application for 2013 crop year

Sections 1103 and 1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 8753), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act (7 U.S.C. 8702)) and peanuts on a farm.

(c)

Continued application for 2014 and 2015 crop years

Subject to this subtitle, the amendments made by sections 1603 and 1604 of this Act, and sections 1607 and 1611 of this Act, section 1103 of the Food, Conservation and Energy Act of 2008 (7 U.S.C. 8713), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2014 and 2015 crop years with respect to upland cotton only (as defined in section 1001 of that Act (7 U.S.C. 8702)), except that, in applying such section 1103, the term payment acres means the following:

(1)

For crop year 2014, 70 percent of the base acres of upland cotton on a farm on which direct payments are made.

(2)

For crop year 2015, 60 percent of the base acres of upland cotton on a farm on which direct payments are made.

1102.

Repeal of counter-cyclical payments

(a)

Repeal

Sections 1104 and 1304 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8714, 8754) are repealed.

(b)

Continued application for 2013 crop year

Sections 1104 and 1304 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8714, 8754), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act (7 U.S.C. 8702)) and peanuts on a farm.

1103.

Repeal of average crop revenue election program

(a)

Repeal

Section 1105 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8715) is repealed.

(b)

Continued application for 2013 crop year

Section 1105 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8715), as in effect on the day before the date of enactment of this Act, shall continue to apply through the 2013 crop year with respect to all covered commodities (as defined in section 1001 of that Act (7 U.S.C. 8702)) and peanuts on a farm for which the irrevocable election under section 1105 of that Act was made before the date of enactment of this Act.

1104.

Definitions

In this subtitle and subtitle B:

(1)

Actual county revenue

The term actual county revenue, with respect to a covered commodity for a crop year, means the amount determined by the Secretary under section 1107(c)(4) to determine whether revenue loss coverage payments are required to be provided for that crop year.

(2)

Base acres

The term base acres, with respect to a covered commodity and cotton on a farm, means the number of acres established under section 1101 and 1302 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911, 7952) or section 1101 and 1302 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8711, 8752), as in effect on September 30, 2013, subject to any adjustment under section 1105 of this Act. For purposes of making payments under subsections (b) and (c) of section 1107, base acres are reduced by the payment acres calculated in 1101(c).

(3)

County revenue loss coverage trigger

The term county revenue loss coverage trigger, with respect to a covered commodity for a crop year, means the amount determined by the Secretary under section 1107(c)(5) to determine whether revenue loss coverage payments are required to be provided for that crop year.

The term effective price, with respect to a covered commodity for a crop year, means the price calculated by the Secretary under section 1107(b)(2) to determine whether price loss coverage payments are required to be provided for that crop year.

(6)

Extra long staple cotton

The term extra long staple cotton means cotton that—

(A)

is produced from pure strain varieties of the Barbadense species or any hybrid of the species, or other similar types of extra long staple cotton, designated by the Secretary, having characteristics needed for various end uses for which United States upland cotton is not suitable and grown in irrigated cotton-growing regions of the United States designated by the Secretary or other areas designated by the Secretary as suitable for the production of the varieties or types; and

(B)

is ginned on a roller-type gin or, if authorized by the Secretary, ginned on another type gin for experimental purposes.

(7)

Farm base acres

The term farm base acres means the sum of the base acreage for all covered commodities and cotton on a farm in effect as of September 30, 2013, and subject to any adjustment under section 1105.

(8)

Medium grain rice

The term medium grain rice includes short grain rice.

(9)

Midseason price

The term midseason price means the applicable national average market price received by producers for the first 5 months of the applicable marketing year, as determined by the Secretary.

(10)

Other oilseed

The term other oilseed means a crop of sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, sesame seed, or any oilseed designated by the Secretary.

(11)

Payment acres

(A)

In general

Except as provided in subparagraphs (B) through (D), the term payment acres, with respect to the provision of price loss coverage payments and revenue loss coverage payments, means—

(i)

85 percent of total acres planted for the year to each covered commodity on a farm; and

(ii)

30 percent of total acres approved as prevented from being planted for the year to each covered commodity on a farm.

(B)

Maximum

The total quantity of payment acres determined under subparagraph (A) shall not exceed the farm base acres.

(C)

Reduction

If the sum of all payment acres for a farm exceeds the limits established under subparagraph (B), the Secretary shall reduce the payment acres applicable to each crop proportionately.

(D)

Exclusion

The term payment acres does not include any crop subsequently planted during the same crop year on the same land for which the first crop is eligible for payments under this subtitle, unless the crop was approved for double cropping in the county, as determined by the Secretary.

(12)

Payment yield

The term payment yield means the yield established for counter-cyclical payments under section 1102 or 1302 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7912, 7952), section 1102 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8712), as in effect on September 30, 2013, or under section 1106 of this Act, for a farm for a covered commodity.

The term producer means an owner, operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to share in the crop available for marketing from the farm, or would have shared had the crop been produced.

(B)

Hybrid seed

In determining whether a grower of hybrid seed is a producer, the Secretary shall—

(i)

not take into consideration the existence of a hybrid seed contract; and

(ii)

ensure that program requirements do not adversely affect the ability of the grower to receive a payment under this title.

(15)

Pulse crop

The term pulse crop means dry peas, lentils, small chickpeas, and large chickpeas.

(16)

Reference price

The term reference price, with respect to a covered commodity for a crop year, means the following:

The term temperate japonica rice means rice that is grown in high altitudes or temperate regions of high latitudes with cooler climate conditions, in the Western United States, as determined by the Secretary.

(21)

Transitional yield

The term transitional yield has the meaning given the term in section 502(b) of the Federal Crop Insurance Act (7 U.S.C. 1502(b)).

(22)

United States

The term United States, when used in a geographical sense, means all of the States.

(23)

United States premium factor

The term United States Premium Factor means the percentage by which the difference in the United States loan schedule premiums for Strict Middling (SM) 11/8-inch upland cotton and for Middling (M) 13/32-inch upland cotton exceeds the difference in the applicable premiums for comparable international qualities.

1105.

Base acres

(a)

Adjustment of base acres

(1)

In general

The Secretary shall provide for an adjustment, as appropriate, in the base acres for covered commodities and cotton for a farm whenever any of the following circumstances occurs:

(A)

A conservation reserve contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) with respect to the farm expires or is voluntarily terminated.

(B)

Cropland is released from coverage under a conservation reserve contract by the Secretary.

(C)

The producer has eligible oilseed acreage as the result of the Secretary designating additional oilseeds, which shall be determined in the same manner as eligible oilseed acreage under section 1101(a)(1)(D) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8711(a)(1)(D)).

(2)

Special conservation reserve acreage payment rules

For the crop year in which a base acres adjustment under subparagraph (A) or (B) of paragraph (1) is first made, the owner of the farm shall elect to receive price loss coverage or revenue loss coverage with respect to the acreage added to the farm under this subsection or a prorated payment under the conservation reserve contract, but not both.

(b)

Prevention of excess base acres

(1)

Required reduction

If the sum of the base acres for a farm, together with the acreage described in paragraph (2) exceeds the actual cropland acreage of the farm, the Secretary shall reduce the base acres for 1 or more covered commodities or cotton for the farm so that the sum of the base acres and acreage described in paragraph (2) does not exceed the actual cropland acreage of the farm.

(2)

Other acreage

For purposes of paragraph (1), the Secretary shall include the following:

(A)

Any acreage on the farm enrolled in the conservation reserve program or wetlands reserve program (or successor programs) under chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3830 et seq.).

(B)

Any other acreage on the farm enrolled in a Federal conservation program for which payments are made in exchange for not producing an agricultural commodity on the acreage.

(C)

If the Secretary designates additional oilseeds, any eligible oilseed acreage, which shall be determined in the same manner as eligible oilseed acreage under subsection (a)(1)(C).

(3)

Selection of acres

The Secretary shall give the owner of the farm the opportunity to select the base acres for a covered commodity or cotton for the farm against which the reduction required by paragraph (1) will be made.

(4)

Exception for double-cropped acreage

In applying paragraph (1), the Secretary shall make an exception in the case of double cropping, as determined by the Secretary.

(c)

Reduction in base acres

(1)

Reduction at option of owner

(A)

In general

The owner of a farm may reduce, at any time, the base acres for any covered commodity or cotton for the farm.

(B)

Effect of reduction

A reduction under subparagraph (A) shall be permanent and made in a manner prescribed by the Secretary.

(2)

Required action by Secretary

(A)

In general

The Secretary shall proportionately reduce base acres on a farm for covered commodities and cotton for land that has been subdivided and developed for multiple residential units or other nonfarming uses if the size of the tracts and the density of the subdivision is such that the land is unlikely to return to the previous agricultural use, unless the producers on the farm demonstrate that the land—

(i)

remains devoted to commercial agricultural production; or

(ii)

is likely to be returned to the previous agricultural use.

(B)

Requirement

The Secretary shall establish procedures to identify land described in subparagraph (A).

1106.

Payment yields

(a)

Establishment and purpose

For the purpose of making payments under this subtitle, the Secretary shall provide for the establishment of a yield for each farm for any designated oilseed for which a payment yield was not established under section 1102 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8712) in accordance with this section.

(b)

Payment yields for designated oilseeds

(1)

Determination of average yield

In the case of designated oilseeds, the Secretary shall determine the average yield per planted acre for the designated oilseed on a farm for the 1998 through 2001 crop years, excluding any crop year in which the acreage planted to the designated oilseed was zero.

(2)

Adjustment for payment yield

(A)

In general

The payment yield for a farm for a designated oilseed shall be equal to the product of the following:

(i)

The average yield for the designated oilseed determined under paragraph (1).

(ii)

The ratio resulting from dividing the national average yield for the designated oilseed for the 1981 through 1985 crops by the national average yield for the designated oilseed for the 1998 through 2001 crops.

(B)

No national average yield information available

To the extent that national average yield information for a designated oilseed is not available, the Secretary shall use such information as the Secretary determines to be fair and equitable to establish a national average yield under this section.

(3)

Use of county average yield

If the yield per planted acre for a crop of a designated oilseed for a farm for any of the 1998 through 2001 crop years was less than 75 percent of the county yield for that designated oilseed, the Secretary shall assign a yield for that crop year equal to 75 percent of the county yield for the purpose of determining the average under paragraph (1).

(4)

No historic yield data available

In the case of establishing yields for designated oilseeds, if historic yield data is not available, the Secretary shall use the ratio for dry peas calculated under paragraph (2)(A)(ii) in determining the yields for designated oilseeds, as determined to be fair and equitable by the Secretary.

(c)

Effect of lack of payment yield

(1)

Establishment by secretary

If no payment yield is otherwise established for a farm for which a covered commodity is planted and eligible to receive price loss coverage payments, the Secretary shall establish an appropriate payment yield for the covered commodity on the farm under paragraph (2).

(2)

Use of similarly situated farms

To establish an appropriate payment yield for a covered commodity on a farm as required by paragraph (1), the Secretary shall take into consideration the farm program payment yields applicable to that covered commodity for similarly situated farms. The use of such data in an appeal, by the Secretary or by the producer, shall not be subject to any other provision of law.

(d)

Single opportunity to update yields used to determine price loss coverage payments

(1)

Election to update

At the sole discretion of the owner of a farm, the owner of a farm shall have a 1-time opportunity to update the payment yields on a covered commodity-by-covered commodity basis that would otherwise be used in calculating any price loss coverage payment for covered commodities on the farm.

(2)

Time for election

The election under paragraph (1) shall be made at a time and manner to be in effect for the 2014 crop year as determined by the Secretary.

(3)

Method of updating yields

If the owner of a farm elects to update yields under this subsection, the payment yield for a covered commodity on the farm, for the purpose of calculating price loss coverage payments only, shall be equal to 90 percent of the average of the yield per planted acre for the crop of the covered commodity on the farm for the 2008 through 2012 crop years, as determined by the Secretary, excluding any crop year in which the acreage planted to the crop of the covered commodity was zero.

(4)

Use of county average yield

If the yield per planted acre for a crop of the covered commodity for a farm for any of the 2008 through 2012 crop years was less than 75 percent of the average of the 2008 through 2012 county yield for that commodity, the Secretary shall assign a yield for that crop year equal to 75 percent of the average of the 2008 through 2012 county yield for the purposes of determining the average yield under paragraph (3).

(5)

Effect of lack of payment yield

(A)

Establishment by secretary

For purposes of this subsection, if no payment yield is otherwise established for a covered commodity on a farm, the Secretary shall establish an appropriate updated payment yield for the covered commodity on the farm under subparagraph (B).

(B)

Use of similarly situated farms

To establish an appropriate payment yield for a covered commodity on a farm as required by subparagraph (A), the Secretary shall take into consideration the farm program payment yields applicable to that covered commodity for similarly situated farms. The use of such data in an appeal, by the Secretary or by the producer, shall not be subject to any other provision of law.

1107.

Farm risk management election

(a)

In general

(1)

Payments required

Except as provided in paragraph (2), if the Secretary determines that payments are required under subsection (b)(1) or (c)(2) for a covered commodity, the Secretary shall make payments for that covered commodity available under such subsection to producers on a farm pursuant to the terms and conditions of this section.

(2)

Prohibition on payments; exceptions

Notwithstanding any other provision of this title, a producer on a farm may not receive price loss coverage payments or revenue loss coverage payments if the sum of the planted acres of covered commodities on the farm is 10 acres or less, as determined by the Secretary, unless the producer is—

(A)

a socially disadvantaged farmer or rancher (as defined in section 355(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e))); or

(B)

a limited resource farmer or rancher, as defined by the Secretary.

(b)

Price loss coverage

(1)

Payments

For each of the 2014 through 2018 crop years, the Secretary shall make price loss coverage payments to producers on a farm for a covered commodity if the Secretary determines that—

(A)

the effective price for the covered commodity for the crop year; is less than

(B)

the reference price for the covered commodity for the crop year.

(2)

Effective price

The effective price for a covered commodity for a crop year shall be the higher of—

(A)

the midseason price; or

(B)

the national average loan rate for a marketing assistance loan for the covered commodity in effect for crop years 2014 through 2018 under subtitle B.

(3)

Payment rate

The payment rate shall be equal to the difference between—

(A)

the reference price for the covered commodity; and

(B)

the effective price determined under paragraph (2) for the covered commodity.

(4)

Payment amount

If price loss coverage payments are required to be provided under this subsection for any of the 2014 through 2018 crop years for a covered commodity, the amount of the price loss coverage payment to be paid to the producers on a farm for the crop year shall be equal to the product obtained by multiplying—

(A)

the payment rate for the covered commodity under paragraph (3);

(B)

the payment yield for the covered commodity; and

(C)

the payment acres for the covered commodity.

(5)

Time for payments

If the Secretary determines under this subsection that price loss coverage payments are required to be provided for the covered commodity, the payments shall be made beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the covered commodity.

(6)

Special rule for barley

In determining the effective price for barley in paragraph (2), the Secretary shall use the all-barley price.

(7)

Special rule for temperate japonica rice

The Secretary shall provide a reference price with respect to temperate japonica rice in an amount equal to 115 percent of the amount established in subparagraphs (F) and (G) of section 1104(16) in order to reflect price premiums.

(c)

Revenue loss coverage

(1)

Available as an alternative

As an alternative to receiving price loss coverage payments under subsection (b) for a covered commodity, all of the owners of the farm may make a one-time, irrevocable election on a covered commodity-by-covered commodity basis to receive revenue loss coverage payments for each covered commodity in accordance with this subsection. If any of the owners of the farm make different elections on the same covered commodity on the farm, all of the owners of the farm shall be deemed to have not made the election available under this paragraph.

(2)

Payments

In the case of owners of a farm that make the election described in paragraph (1) for a covered commodity, the Secretary shall make revenue loss coverage payments available under this subsection for each of the 2014 through 2018 crop years if the Secretary determines that—

(A)

the actual county revenue for the crop year for the covered commodity; is less than

(B)

the county revenue loss coverage trigger for the crop year for the covered commodity.

(3)

Time for payments

If the Secretary determines under this subsection that revenue loss coverage payments are required to be provided for the covered commodity, payments shall be made beginning October 1, or as soon as practicable thereafter, after the end of the applicable marketing year for the covered commodity.

(4)

Actual county revenue

The amount of the actual county revenue for a crop year of a covered commodity shall be equal to the product obtained by multiplying—

(A)

the actual county yield, as determined by the Secretary, for each planted acre for the crop year for the covered commodity; and

(B)

the higher of—

(i)

the midseason price; or

(ii)

the national average loan rate for a marketing assistance loan for the covered commodity in effect for crop years 2014 through 2018 under subtitle B.

(5)

County revenue loss coverage trigger

(A)

In general

The county revenue loss coverage trigger for a crop year for a covered commodity on a farm shall equal 85 percent of the benchmark county revenue.

(B)

Benchmark county revenue

(i)

In general

The benchmark county revenue shall be the product obtained by multiplying—

(I)

subject to clause (ii), the average historical county yield as determined by the Secretary for the most recent 5 crop years, excluding each of the crop years with the highest and lowest yields; and

(II)

subject to clause (iii), the average national marketing year average price for the most recent 5 crop years, excluding each of the crop years with the highest and lowest prices.

(ii)

Yield conditions

If the historical county yield in clause (i)(I) for any of the 5 most recent crop years, as determined by the Secretary, is less than 70 percent of the transitional yield, as determined by the Secretary, the amounts used for any of those years in clause (i)(I) shall be 70 percent of the transitional yield.

(iii)

Reference price

If the national marketing year average price in clause (i)(II) for any of the 5 most recent crop years is lower than the reference price for the covered commodity, the Secretary shall use the reference price for any of those years for the amounts in clause (i)(II).

(6)

Payment rate

The payment rate shall be equal to the lesser of—

(A)

the difference between—

(i)

the county revenue loss coverage trigger for the covered commodity; and

(ii)

the actual county revenue for the crop year for the covered commodity; or

(B)

10 percent of the benchmark county revenue for the crop year for the covered commodity.

(7)

Payment amount

If revenue loss coverage payments under this subsection are required to be provided for any of the 2014 through 2018 crop years of a covered commodity, the amount of the revenue loss coverage payment to be provided to the producers on a farm for the crop year shall be equal to the product obtained by multiplying—

(A)

the payment rate under paragraph (6); and

(B)

the payment acres of the covered commodity on the farm.

(8)

Duties of the secretary

In providing revenue loss coverage payments under this subsection, the Secretary—

(A)

shall ensure that producers on a farm do not reconstitute the farm of the producers to void or change the election made under paragraph (1);

(B)

to the maximum extent practicable, shall use all available information and analysis, including data mining, to check for anomalies in the provision of revenue loss coverage payments;

(C)

to the maximum extent practicable, shall calculate a separate county revenue loss coverage trigger for irrigated and nonirrigated covered commodities and a separate actual county revenue for irrigated and nonirrigated covered commodities;

(D)

shall assign a benchmark county yield for each planted acre for the crop year for the covered commodity on the basis of the yield history of representative farms in the State, region, or crop reporting district, as determined by the Secretary, if—

(i)

the Secretary cannot establish the benchmark county yield for each planted acre for a crop year for a covered commodity in the county in accordance with paragraph (5); or

(ii)

the yield determined under paragraph (5) is an unrepresentative average yield for the county (as determined by the Secretary); and

(E)

to the maximum extent practicable, shall ensure that in order to be eligible for a payment under this subsection, the producers on the farm suffered an actual loss on the covered commodity for the crop year for which payment is sought.

1108.

Producer agreements

(a)

Compliance with certain requirements

(1)

Requirements

Before the producers on a farm may receive payments under this subtitle with respect to the farm, the producers shall agree, during the crop year for which the payments are made and in exchange for the payments—

(A)

to comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.);

(B)

to comply with applicable wetland protection requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.); and

(C)

to effectively control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices, as determined by the Secretary.

(2)

Compliance

The Secretary may issue such rules as the Secretary considers necessary to ensure producer compliance with the requirements of paragraph (1).

(3)

Modification

At the request of the transferee or owner, the Secretary may modify the requirements of this subsection if the modifications are consistent with the objectives of this subsection, as determined by the Secretary.

(b)

Transfer or change of interest in farm

(1)

Termination

(A)

In general

Except as provided in paragraph (2), a transfer of (or change in) the interest of the producers on a farm for which payments under this subtitle are provided shall result in the termination of the payments, unless the transferee or owner of the acreage agrees to assume all obligations under subsection (a).

(B)

Effective date

The termination shall take effect on the date determined by the Secretary.

(2)

Exception

If a producer entitled to a payment under this subtitle dies, becomes incompetent, or is otherwise unable to receive the payment, the Secretary shall make the payment in accordance with rules issued by the Secretary.

(c)

Acreage reports

As a condition on the receipt of any benefits under this subtitle or subtitle B, the Secretary shall require producers on a farm to submit to the Secretary annual acreage reports with respect to all cropland on the farm.

(d)

Tenants and sharecroppers

In carrying out this subtitle, the Secretary shall provide adequate safeguards to protect the interests of tenants and sharecroppers.

(e)

Sharing of payments

The Secretary shall provide for the sharing of payments made under this subtitle among the producers on a farm on a fair and equitable basis.

1109.

Period of effectiveness

This subtitle shall be effective beginning with the 2014 crop year of each covered commodity through the 2018 crop year.

For each of the 2014 through 2018 crops of each loan commodity, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for loan commodities produced on the farm.

(2)

Terms and conditions

The marketing assistance loans shall be made under terms and conditions that are prescribed by the Secretary and at the loan rate established under section 1202 for the loan commodity.

(c)

Eligible production

The producers on a farm shall be eligible for a marketing assistance loan under subsection (b) for any quantity of a loan commodity produced on the farm.

(d)

Compliance with conservation and wetlands requirements

As a condition of the receipt of a marketing assistance loan under subsection (b), the producer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland protection requirements under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.) during the term of the loan.

(e)

Special rules for peanuts

(1)

In general

This subsection shall apply only to producers of peanuts.

(2)

Options for obtaining loan

A marketing assistance loan under this section, and loan deficiency payments under section 1205, may be obtained at the option of the producers on a farm through—

(A)

a designated marketing association or marketing cooperative of producers that is approved by the Secretary; or

(B)

the Farm Service Agency.

(3)

Storage of loan peanuts

As a condition on the approval by the Secretary of an individual or entity to provide storage for peanuts for which a marketing assistance loan is made under this section, the individual or entity shall agree—

(A)

to provide the storage on a nondiscriminatory basis; and

(B)

to comply with such additional requirements as the Secretary considers appropriate to accomplish the purposes of this section and promote fairness in the administration of the benefits of this section.

(4)

Storage, handling, and associated costs

(A)

In general

To ensure proper storage of peanuts for which a loan is made under this section, the Secretary shall pay handling and other associated costs (other than storage costs) incurred at the time at which the peanuts are placed under loan, as determined by the Secretary.

(B)

Redemption and forfeiture

The Secretary shall—

(i)

require the repayment of handling and other associated costs paid under subparagraph (A) for all peanuts pledged as collateral for a loan that is redeemed under this section; and

(ii)

pay storage, handling, and other associated costs for all peanuts pledged as collateral that are forfeited under this section.

(5)

Marketing

A marketing association or cooperative may market peanuts for which a loan is made under this section in any manner that conforms to consumer needs, including the separation of peanuts by type and quality.

(6)

Reimbursable agreements and payment of administrative expenses

The Secretary may implement any reimbursable agreements or provide for the payment of administrative expenses under this subsection only in a manner that is consistent with those activities in regard to other loan commodities.

1202.

Loan rates for nonrecourse marketing assistance loans

(a)

In general

For purposes of each of the 2014 through 2018 crop years, the loan rate for a marketing assistance loan under section 1201 for a loan commodity shall be equal to the following:

(1)

In the case of wheat, $2.94 per bushel.

(2)

In the case of corn, $1.95 per bushel.

(3)

In the case of grain sorghum, $1.95 per bushel.

(4)

In the case of barley, $1.95 per bushel.

(5)

In the case of oats, $1.39 per bushel.

(6)

In the case of base quality of upland cotton, for the 2014 and each subsequent crop year, the simple average of the adjusted prevailing world price for the 2 immediately preceding marketing years, as determined by the Secretary and announced October 1 preceding the next domestic plantings, but in no case less than $0.47 per pound or more than $0.52 per pound.

(7)

In the case of extra long staple cotton, $0.7977 per pound.

(8)

In the case of long grain rice, $6.50 per hundredweight.

(9)

In the case of medium grain rice, $6.50 per hundredweight.

(10)

In the case of soybeans, $5.00 per bushel.

(11)

In the case of other oilseeds, $10.09 per hundredweight for each of the following kinds of oilseeds:

(A)

Sunflower seed.

(B)

Rapeseed.

(C)

Canola.

(D)

Safflower.

(E)

Flaxseed.

(F)

Mustard seed.

(G)

Crambe.

(H)

Sesame seed.

(I)

Other oilseeds designated by the Secretary.

(12)

In the case of dry peas, $5.40 per hundredweight.

(13)

In the case of lentils, $11.28 per hundredweight.

(14)

In the case of small chickpeas, $7.43 per hundredweight.

(15)

In the case of large chickpeas, $11.28 per hundredweight.

(16)

In the case of graded wool, $1.15 per pound.

(17)

In the case of nongraded wool, $0.40 per pound.

(18)

In the case of mohair, $4.20 per pound.

(19)

In the case of honey, $0.69 per pound.

(20)

In the case of peanuts, $355 per ton.

(b)

Single county loan rate for other oilseeds

The Secretary shall establish a single loan rate in each county for each kind of other oilseeds described in subsection (a)(11).

1203.

Term of loans

(a)

Term of loan

In the case of each loan commodity, a marketing assistance loan under section 1201 shall have a term of 9 months beginning on the first day of the first month after the month in which the loan is made.

(b)

Extensions prohibited

The Secretary may not extend the term of a marketing assistance loan for any loan commodity.

1204.

Repayment of loans

(a)

General rule

The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for a loan commodity (other than upland cotton, long grain rice, medium grain rice, extra long staple cotton, peanuts and confectionery and each other kind of sunflower seed (other than oil sunflower seed)) at a rate that is the lesser of—

(1)

the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283));

(2)

a rate (as determined by the Secretary) that—

(A)

is calculated based on average market prices for the loan commodity during the preceding 30-day period; and

(B)

will minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries; or

(3)

a rate that the Secretary may develop using alternative methods for calculating a repayment rate for a loan commodity that the Secretary determines will—

(A)

minimize potential loan forfeitures;

(B)

minimize the accumulation of stocks of the commodity by the Federal Government;

(C)

minimize the cost incurred by the Federal Government in storing the commodity;

(D)

allow the commodity produced in the United States to be marketed freely and competitively, both domestically and internationally; and

(E)

minimize discrepancies in marketing loan benefits across State boundaries and across county boundaries.

The Secretary shall permit producers to repay a marketing assistance loan under section 1201 for upland cotton, long grain rice, and medium grain rice at a rate that is the lesser of—

(1)

the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

(2)

the prevailing world market price for the commodity, as determined and adjusted by the Secretary in accordance with this section.

(c)

Repayment rates for extra long staple cotton

Repayment of a marketing assistance loan for extra long staple cotton shall be at the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

(d)

Prevailing world market price

For purposes of this section and section 1207, the Secretary shall prescribe by regulation—

(1)

a formula to determine the prevailing world market price for each of upland cotton, long grain rice, and medium grain rice; and

(2)

a mechanism by which the Secretary shall announce periodically those prevailing world market prices.

(e)

Adjustment of prevailing world market price for upland cotton, long grain rice, and medium grain rice

(1)

Rice

The prevailing world market price for long grain rice and medium grain rice determined under subsection (d) shall be adjusted to United States quality and location.

(2)

Cotton

The prevailing world market price for upland cotton determined under subsection (d)—

(A)

shall be adjusted to United States quality and location, with the adjustment to include—

(i)

a reduction equal to any United States Premium Factor for upland cotton of a quality higher than Middling (M) 13/32-inch; and

(ii)

the average costs to market the commodity, including average transportation costs, as determined by the Secretary; and

(B)

may be further adjusted, during the period beginning on the date of enactment of this Act and ending on July 31, 2019, if the Secretary determines the adjustment is necessary—

(i)

to minimize potential loan forfeitures;

(ii)

to minimize the accumulation of stocks of upland cotton by the Federal Government;

(iii)

to ensure that upland cotton produced in the United States can be marketed freely and competitively, both domestically and internationally; and

(iv)

to ensure an appropriate transition between current-crop and forward-crop price quotations, except that the Secretary may use forward-crop price quotations prior to July 31 of a marketing year only if—

(I)

there are insufficient current-crop price quotations; and

(II)

the forward-crop price quotation is the lowest such quotation available.

(3)

Guidelines for additional adjustments

In making adjustments under this subsection, the Secretary shall establish a mechanism for determining and announcing the adjustments in order to avoid undue disruption in the United States market.

(f)

Repayment rates for confectionery and other kinds of sunflower seeds

The Secretary shall permit the producers on a farm to repay a marketing assistance loan under section 1201 for confectionery and each other kind of sunflower seed (other than oil sunflower seed) at a rate that is the lesser of—

(1)

the loan rate established for the commodity under section 1202, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

(2)

the repayment rate established for oil sunflower seed.

(g)

Payment of cotton storage costs

Effective for each of the 2014 through 2018 crop years, the Secretary shall make cotton storage payments available in the same manner, and at the same rates as the Secretary provided storage payments for the 2006 crop of cotton, except that the rates shall be reduced by 10 percent.

(h)

Repayment rate for peanuts

The Secretary shall permit producers on a farm to repay a marketing assistance loan for peanuts under section 1201 at a rate that is the lesser of—

(1)

the loan rate established for peanuts under section 1202(a)(20), plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or

(2)

a rate that the Secretary determines will—

(A)

minimize potential loan forfeitures;

(B)

minimize the accumulation of stocks of peanuts by the Federal Government;

(C)

minimize the cost incurred by the Federal Government in storing peanuts; and

(D)

allow peanuts produced in the United States to be marketed freely and competitively, both domestically and internationally.

(i)

Authority to temporarily adjust repayment rates

(1)

Adjustment authority

In the event of a severe disruption to marketing, transportation, or related infrastructure, the Secretary may modify the repayment rate otherwise applicable under this section for marketing assistance loans under section 1201 for a loan commodity.

(2)

Duration

Any adjustment made under paragraph (1) in the repayment rate for marketing assistance loans for a loan commodity shall be in effect on a short-term and temporary basis, as determined by the Secretary.

1205.

Loan deficiency payments

(a)

Availability of loan deficiency payments

(1)

In general

Except as provided in subsection (d), the Secretary may make loan deficiency payments available to producers on a farm that, although eligible to obtain a marketing assistance loan under section 1201 with respect to a loan commodity, agree to forgo obtaining the loan for the commodity in return for loan deficiency payments under this section.

(2)

Unshorn pelts, hay, and silage

(A)

Marketing assistance loans

Subject to subparagraph (B), nongraded wool in the form of unshorn pelts and hay and silage derived from a loan commodity are not eligible for a marketing assistance loan under section 1201.

(B)

Loan deficiency payment

Effective for the 2014 through 2018 crop years, the Secretary may make loan deficiency payments available under this section to producers on a farm that produce unshorn pelts or hay and silage derived from a loan commodity.

(b)

Computation

A loan deficiency payment for a loan commodity or commodity referred to in subsection (a)(2) shall be equal to the product obtained by multiplying—

(1)

the payment rate determined under subsection (c) for the commodity; by

(2)

the quantity of the commodity produced by the eligible producers, excluding any quantity for which the producers obtain a marketing assistance loan under section 1201.

(c)

Payment rate

(1)

In general

In the case of a loan commodity, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for the loan commodity; exceeds

(B)

the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204.

(2)

Unshorn pelts

In the case of unshorn pelts, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for ungraded wool; exceeds

(B)

the rate at which a marketing assistance loan for ungraded wool may be repaid under section 1204.

(3)

Hay and silage

In the case of hay or silage derived from a loan commodity, the payment rate shall be the amount by which—

(A)

the loan rate established under section 1202 for the loan commodity from which the hay or silage is derived; exceeds

(B)

the rate at which a marketing assistance loan for the loan commodity may be repaid under section 1204.

(d)

Exception for extra long staple cotton

This section shall not apply with respect to extra long staple cotton.

(e)

Effective date for payment rate determination

The Secretary shall determine the amount of the loan deficiency payment to be made under this section to the producers on a farm with respect to a quantity of a loan commodity or commodity referred to in subsection (a)(2) using the payment rate in effect under subsection (c) as of the date the producers request the payment.

1206.

Payments in lieu of loan deficiency payments for grazed acreage

(a)

Eligible producers

(1)

In general

Effective for the 2014 through 2018 crop years, in the case of a producer that would be eligible for a loan deficiency payment under section 1205 for wheat, barley, or oats, but that elects to use acreage planted to the wheat, barley, or oats for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of the wheat, barley, or oats on that acreage.

(2)

Grazing of triticale acreage

Effective for the 2014 through 2018 crop years, with respect to a producer on a farm that uses acreage planted to triticale for the grazing of livestock, the Secretary shall make a payment to the producer under this section if the producer enters into an agreement with the Secretary to forgo any other harvesting of triticale on that acreage.

(b)

Payment amount

(1)

In general

The amount of a payment made under this section to a producer on a farm described in subsection (a)(1) shall be equal to the amount determined by multiplying—

(A)

the loan deficiency payment rate determined under section 1205(c) in effect, as of the date of the agreement, for the county in which the farm is located; by

(B)

the payment quantity determined by multiplying—

(i)

the quantity of the grazed acreage on the farm with respect to which the producer elects to forgo harvesting of wheat, barley, or oats; and

(ii)(I)

the payment yield in effect for the calculation of price loss coverage under subtitle A with respect to that loan commodity on the farm; or

(II)

in the case of a farm without a payment yield for that loan commodity, an appropriate yield established by the Secretary in a manner consistent with section 1106(c) of this Act.

(2)

Grazing of triticale acreage

The amount of a payment made under this section to a producer on a farm described in subsection (a)(2) shall be equal to the amount determined by multiplying—

(A)

the loan deficiency payment rate determined under section 1205(c) in effect for wheat, as of the date of the agreement, for the county in which the farm is located; by

(B)

the payment quantity determined by multiplying—

(i)

the quantity of the grazed acreage on the farm with respect to which the producer elects to forgo harvesting of triticale; and

(ii)(I)

the payment yield in effect for the calculation of price loss coverage under subtitle A with respect to wheat on the farm; or

(II)

in the case of a farm without a payment yield for wheat, an appropriate yield established by the Secretary in a manner consistent with section 1106(c) of this Act.

(c)

Time, manner, and availability of payment

(1)

Time and manner

A payment under this section shall be made at the same time and in the same manner as loan deficiency payments are made under section 1205.

(2)

Availability

(A)

In general

The Secretary shall establish an availability period for the payments authorized by this section.

(B)

Certain commodities

In the case of wheat, barley, and oats, the availability period shall be consistent with the availability period for the commodity established by the Secretary for marketing assistance loans authorized by this subtitle.

(d)

Prohibition on crop insurance indemnity or noninsured crop assistance

A 2014 through 2018 crop of wheat, barley, oats, or triticale planted on acreage that a producer elects, in the agreement required by subsection (a), to use for the grazing of livestock in lieu of any other harvesting of the crop shall not be eligible for an indemnity under a policy or plan of insurance authorized under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop assistance under section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

1207.

Special marketing loan provisions for upland cotton

(a)

Special import quota

(1)

Definition of special import quota

In this subsection, the term special import quota means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota.

(2)

Establishment

(A)

In general

The President shall carry out an import quota program during the period beginning on August 1, 2014, and ending on July 31, 2019, as provided in this subsection.

(B)

Program requirements

Whenever the Secretary determines and announces that for any consecutive 4-week period, the Friday through Thursday average price quotation for the lowest-priced United States growth, as quoted for Middling (M) 13/32-inch cotton, delivered to a definable and significant international market, as determined by the Secretary, exceeds the prevailing world market price, there shall immediately be in effect a special import quota.

(3)

Quantity

The quota shall be equal to the consumption during a 1-week period of cotton by domestic mills at the seasonally adjusted average rate of the most recent 3 months for which official data of the Department of Agriculture are available or, in the absence of sufficient data, as estimated by the Secretary.

(4)

Application

The quota shall apply to upland cotton purchased not later than 90 days after the date of the Secretary’s announcement under paragraph (2) and entered into the United States not later than 180 days after that date.

(5)

Overlap

A special quota period may be established that overlaps any existing quota period if required by paragraph (2), except that a special quota period may not be established under this subsection if a quota period has been established under subsection (b).

(6)

Preferential tariff treatment

The quantity under a special import quota shall be considered to be an in-quota quantity for purposes of—

The quantity of cotton entered into the United States during any marketing year under the special import quota established under this subsection may not exceed the equivalent of 10 week’s consumption of upland cotton by domestic mills at the seasonally adjusted average rate of the 3 months immediately preceding the first special import quota established in any marketing year.

(b)

Limited global import quota for upland cotton

(1)

Definitions

In this subsection:

(A)

Demand

The term demand means—

(i)

the average seasonally adjusted annual rate of domestic mill consumption of cotton during the most recent 3 months for which official data of the Department of Agriculture are available or, in the absence of sufficient data, as estimated by the Secretary; and

(ii)

the larger of—

(I)

average exports of upland cotton during the preceding 6 marketing years; or

(II)

cumulative exports of upland cotton plus outstanding export sales for the marketing year in which the quota is established.

(B)

Limited global import quota

The term limited global import quota means a quantity of imports that is not subject to the over-quota tariff rate of a tariff-rate quota.

(C)

Supply

The term supply means, using the latest official data of the Department of Agriculture—

(i)

the carry-over of upland cotton at the beginning of the marketing year (adjusted to 480-pound bales) in which the quota is established;

(ii)

production of the current crop; and

(iii)

imports to the latest date available during the marketing year.

(2)

Program

The President shall carry out an import quota program that provides that whenever the Secretary determines and announces that the average price of the base quality of upland cotton, as determined by the Secretary, in the designated spot markets for a month exceeded 130 percent of the average price of the quality of cotton in the markets for the preceding 36 months, notwithstanding any other provision of law, there shall immediately be in effect a limited global import quota subject to the following conditions:

(A)

Quantity

The quantity of the quota shall be equal to 21 days of domestic mill consumption of upland cotton at the seasonally adjusted average rate of the most recent 3 months for which official data of the Department of Agriculture are available or, in the absence of sufficient data, as estimated by the Secretary.

(B)

Quantity if prior quota

If a quota has been established under this subsection during the preceding 12 months, the quantity of the quota next established under this subsection shall be the smaller of 21 days of domestic mill consumption calculated under subparagraph (A) or the quantity required to increase the supply to 130 percent of the demand.

(C)

Preferential tariff treatment

The quantity under a limited global import quota shall be considered to be an in-quota quantity for purposes of—

When a quota is established under this subsection, cotton may be entered under the quota during the 90-day period beginning on the date the quota is established by the Secretary.

(3)

No overlap

Notwithstanding paragraph (2), a quota period may not be established that overlaps an existing quota period or a special quota period established under subsection (a).

(c)

Economic adjustment assistance to users of upland cotton

(1)

In general

Subject to paragraph (2), the Secretary shall, on a monthly basis, make economic adjustment assistance available to domestic users of upland cotton in the form of payments for all documented use of that upland cotton during the previous monthly period regardless of the origin of the upland cotton.

(2)

Value of assistance

Effective beginning on August 1, 2013, the value of the assistance provided under paragraph (1) shall be 3 cents per pound.

(3)

Allowable purposes

Economic adjustment assistance under this subsection shall be made available only to domestic users of upland cotton that certify that the assistance shall be used only to acquire, construct, install, modernize, develop, convert, or expand land, plant, buildings, equipment, facilities, or machinery.

(4)

Review or audit

The Secretary may conduct such review or audit of the records of a domestic user under this subsection as the Secretary determines necessary to carry out this subsection.

(5)

Improper use of assistance

If the Secretary determines, after a review or audit of the records of the domestic user, that economic adjustment assistance under this subsection was not used for the purposes specified in paragraph (3), the domestic user shall be—

(A)

liable for the repayment of the assistance to the Secretary, plus interest, as determined by the Secretary; and

(B)

ineligible to receive assistance under this subsection for a period of 1 year following the determination of the Secretary.

1208.

Special competitive provisions for extra long staple cotton

(a)

Competitiveness program

Notwithstanding any other provision of law, during the period beginning on the date of enactment of this Act through July 31, 2019, the Secretary shall carry out a program—

(1)

to maintain and expand the domestic use of extra long staple cotton produced in the United States;

(2)

to increase exports of extra long staple cotton produced in the United States; and

(3)

to ensure that extra long staple cotton produced in the United States remains competitive in world markets.

(b)

Payments under program; trigger

Under the program, the Secretary shall make payments available under this section whenever—

(1)

for a consecutive 4-week period, the world market price for the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is below the prevailing United States price for a competing growth of extra long staple cotton; and

(2)

the lowest priced competing growth of extra long staple cotton (adjusted to United States quality and location and for other factors affecting the competitiveness of such cotton), as determined by the Secretary, is less than 134 percent of the loan rate for extra long staple cotton.

(c)

Eligible recipients

The Secretary shall make payments available under this section to domestic users of extra long staple cotton produced in the United States and exporters of extra long staple cotton produced in the United States that enter into an agreement with the Commodity Credit Corporation to participate in the program under this section.

(d)

Payment amount

Payments under this section shall be based on the amount of the difference in the prices referred to in subsection (b)(1) during the fourth week of the consecutive 4-week period multiplied by the amount of documented purchases by domestic users and sales for export by exporters made in the week following such a consecutive 4-week period.

1209.

Availability of recourse loans for high moisture feed grains and seed cotton

(a)

High moisture feed grains

(1)

Definition of high moisture state

In this subsection, the term high moisture state means corn or grain sorghum having a moisture content in excess of Commodity Credit Corporation standards for marketing assistance loans made by the Secretary under section 1201.

(2)

Recourse loans available

For each of the 2014 through 2018 crops of corn and grain sorghum, the Secretary shall make available recourse loans, as determined by the Secretary, to producers on a farm that—

(A)

normally harvest all or a portion of their crop of corn or grain sorghum in a high moisture state;

(B)

present—

(i)

certified scale tickets from an inspected, certified commercial scale, including a licensed warehouse, feedlot, feed mill, distillery, or other similar entity approved by the Secretary, pursuant to regulations issued by the Secretary; or

(ii)

field or other physical measurements of the standing or stored crop in regions of the United States, as determined by the Secretary, that do not have certified commercial scales from which certified scale tickets may be obtained within reasonable proximity of harvest operation;

(C)

certify that the producers on the farm were the owners of the feed grain at the time of delivery to, and that the quantity to be placed under loan under this subsection was in fact harvested on the farm and delivered to, a feedlot, feed mill, or commercial or on-farm high-moisture storage facility, or to a facility maintained by the users of corn and grain sorghum in a high moisture state; and

(D)

comply with deadlines established by the Secretary for harvesting the corn or grain sorghum and submit applications for loans under this subsection within deadlines established by the Secretary.

(3)

Eligibility of acquired feed grains

A loan under this subsection shall be made on a quantity of corn or grain sorghum of the same crop acquired by the producer equivalent to a quantity determined by multiplying—

(A)

the acreage of the corn or grain sorghum in a high moisture state harvested on the farm of the producer; by

(B)

the lower of the farm program payment yield used to make payments under subtitle A or the actual yield on a field, as determined by the Secretary, that is similar to the field from which the corn or grain sorghum was obtained.

(b)

Recourse loans available for seed cotton

For each of the 2014 through 2018 crops of upland cotton and extra long staple cotton, the Secretary shall make available recourse seed cotton loans, as determined by the Secretary, on any production.

(c)

Repayment rates

Repayment of a recourse loan made under this section shall be at the loan rate established for the commodity by the Secretary, plus interest (determined in accordance with section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

1210.

Adjustments of loans

(a)

Adjustment authority

Subject to subsection (e), the Secretary may make appropriate adjustments in the loan rates for any loan commodity (other than cotton) for differences in grade, type, quality, location, and other factors.

(b)

Manner of adjustment

The adjustments under subsection (a) shall, to the maximum extent practicable, be made in such a manner that the average loan level for the commodity will, on the basis of the anticipated incidence of the factors, be equal to the level of support determined in accordance with this subtitle and subtitle C.

(c)

Adjustment on county basis

(1)

In general

The Secretary may establish loan rates for a crop for producers in individual counties in a manner that results in the lowest loan rate being 95 percent of the national average loan rate, if those loan rates do not result in an increase in outlays.

(2)

Prohibition

Adjustments under this subsection shall not result in an increase in the national average loan rate for any year.

(d)

Adjustment in loan rate for cotton

(1)

In general

The Secretary may make appropriate adjustments in the loan rate for cotton for differences in quality factors.

(2)

Types of adjustments

Loan rate adjustments under paragraph (1) may include—

(A)

the use of non-spot market price data, in addition to spot market price data, that would enhance the accuracy of the price information used in determining quality adjustments under this subsection;

(B)

adjustments in the premiums or discounts associated with upland cotton with a staple length of 33 or above due to micronaire with the goal of eliminating any unnecessary artificial splits in the calculations of the premiums or discounts; and

(C)

such other adjustments as the Secretary determines appropriate, after consultations conducted in accordance with paragraph (3).

(3)

Consultation with private sector

(A)

Prior to revision

In making adjustments to the loan rate for cotton (including any review of the adjustments) as provided in this subsection, the Secretary shall consult with representatives of the United States cotton industry.

(B)

Inapplicability of Federal Advisory Committee Act

The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply to consultations under this subsection.

(4)

Review of adjustments

The Secretary may review the operation of the upland cotton quality adjustments implemented pursuant to this subsection and may make further adjustments to the administration of the loan program for upland cotton, by revoking or revising any adjustment taken under paragraph (2).

(e)

Rice

The Secretary shall not make adjustments in the loan rates for long grain rice and medium grain rice, except for differences in grade and quality (including milling yields).

C

Sugar

1301.

Sugar program

(a)

Continuation of current program and loan rates

(1)

Sugarcane

Section 156(a)(5) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(a)(5)) is amended by striking the 2012 crop year and inserting each of the 2012 through 2018 crop years.

(2)

Sugar beets

Section 156(b)(2) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(b)(2)) is amended by striking 2012 and inserting 2018.

(3)

Effective period

Section 156(i) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(i)) is amended by striking 2012 and inserting 2018.

(b)

Flexible marketing allotments for sugar

(1)

Sugar estimates

Section 359b(a)(1) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb(a)(1)) is amended by striking 2012 and inserting 2018.

(2)

Effective period

Section 359l(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ll(a)) is amended by striking 2012 and inserting 2018.

The term actual dairy producer margin means the difference between the all-milk price and the average feed cost, as calculated under section 1402.

(2)

All-milk price

The term all-milk price means the average price received, per hundredweight of milk, by dairy producers for all milk sold to plants and dealers in the United States, as determined by the Secretary.

(3)

Annual production history

The term annual production history means the production history determined for a participating dairy producer under section 1413(b) whenever the dairy producer purchases supplemental margin protection.

(4)

Average feed cost

The term average feed cost means the average cost of feed used by a dairy operation to produce a hundredweight of milk, determined under section 1402 using the sum of the following:

(A)

The product determined by multiplying 1.0728 by the price of corn per bushel.

(B)

The product determined by multiplying 0.00735 by the price of soybean meal per ton.

(C)

The product determined by multiplying 0.0137 by the price of alfalfa hay per ton.

(5)

Basic production history

The term basic production history means the production history determined for a participating dairy producer under section 1413(a) for provision of basic margin protection.

(6)

Consecutive two-month period

The term consecutive two-month period refers to the two-month period consisting of the months of January and February, March and April, May and June, July and August, September and October, or November and December, respectively.

(7)

Dairy producer

(A)

In general

Subject to subparagraph (B), the term dairy producer means an individual or entity that directly or indirectly (as determined by the Secretary)—

(i)

shares in the risk of producing milk; and

(ii)

makes contributions (including land, labor, management, equipment, or capital) to the dairy operation of the individual or entity that are at least commensurate with the share of the individual or entity of the proceeds of the operation.

(B)

Additional ownership structures

The Secretary shall determine additional ownership structures to be covered by the definition of dairy producer.

(8)

Handler

(A)

In general

The term handler means the initial individual or entity making payment to a dairy producer for milk produced in the United States and marketed for commercial use.

(B)

Producer-handler

The term includes a producer-handler when the producer satisfies the definition in subparagraph (A).

(9)

Margin protection program

The term margin protection program means the dairy producer margin protection program required by subpart A.

(10)

Participating dairy producer

The term participating dairy producer means a dairy producer that—

(A)

signs up under section 1412 to participate in the margin protection program under subpart A; and

(B)

as a result, also participates in the stabilization program under subpart B.

(11)

Stabilization program

The term stabilization program means the dairy market stabilization program required by subpart B for all participating dairy producers.

(12)

Stabilization program base

The term stabilization program base, with respect to a participating dairy producer, means the stabilization program base calculated for the producer under section 1431(b).

(13)

United States

The term United States, in a geographical sense, means the 50 States, the District of Columbia, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, the Virgin Islands of the United States, and any other territory or possession of the United States.

1402.

Calculation of average feed cost and actual dairy producer margins

(a)

Calculation of average feed cost

The Secretary shall calculate the national average feed cost for each month using the following data:

(1)

The price of corn for a month shall be the price received during that month by farmers in the United States for corn, as reported in the monthly Agricultural Prices report by the Secretary.

(2)

The price of soybean meal for a month shall be the central Illinois price for soybean meal, as reported in the Market News-Monthly Soybean Meal Price Report by the Secretary.

(3)

The price of alfalfa hay for a month shall be the price received during that month by farmers in the United States for alfalfa hay, as reported in the monthly Agricultural Prices report by the Secretary.

(b)

Calculation of actual dairy producer margins

(1)

Margin protection program

For use in the margin protection program under subpart A, the Secretary shall calculate the actual dairy producer margin for each consecutive two-month period by subtracting—

(A)

the average feed cost for that consecutive two-month period, determined in accordance with subsection (a); from

(B)

the all-milk price for that consecutive two-month period.

(2)

Stabilization program

For use in the stabilization program under subpart B, the Secretary shall calculate each month the actual dairy producer margin for the preceding month by subtracting—

(A)

the average feed cost for that preceding month, determined in accordance with subsection (a); from

(B)

the all-milk price for that preceding month.

(3)

Time for calculations

The calculations required by paragraphs (1) and (2) shall be made as soon as practicable each month using the full month price of the applicable reference month, but in no case shall the calculation be made later than the last business day of the month.

A

Dairy producer margin protection program

1411.

Establishment of dairy producer margin protection program

The Secretary shall establish and administer a dairy producer margin protection program for the purpose of protecting dairy producer income by paying participating dairy producers—

(1)

basic margin protection payments when actual dairy producer margins are less than the threshold levels for such payments; and

The Secretary shall allow all interested dairy producers to sign up to participate in the margin protection program. The Secretary shall specify the manner and form by which a dairy producer must sign up to participate in the margin protection program.

(2)

Treatment of Multi-Producer Operations

If a dairy operation consists of more than one dairy producer, all of the dairy producers of the operation shall be treated as a single dairy producer for purposes of—

payment of the administrative fee under subsection (e) and producer premiums under section 1415; and

(C)

participation in the stabilization program under subpart B.

(3)

Treatment of Producers with Multiple Dairy Operations

If a dairy producer operates two or more dairy operations, each dairy operation of the producer shall require a separate registration to receive basic margin protection and purchase supplemental margin protection. Only those dairy operations so registered shall be subject to the stabilization program.

(c)

Time for sign up

(1)

Existing Dairy Producers

During the one-year period beginning on the date of the initiation of the sign-up period for the margin protection program, a dairy producer that is actively engaged in a dairy operation as of such date may sign up with the Secretary—

(A)

to receive basic margin protection; and

(B)

if the producer elects, to purchase supplemental margin protection.

(2)

New Entrants

A dairy producer that has no existing interest in a dairy operation as of the date of the initiation of the sign-up period for the margin protection program, but that, after such date, establishes a new dairy operation, may sign up with the Secretary during the one year period beginning on the date on which the dairy operation first markets milk commercially—

(A)

to receive basic margin protection; and

(B)

if the producer elects, to purchase supplemental margin protection.

(d)

Retroactivity provision

(1)

Notice of availability of retroactive protection

Not later than 30 days after the effective date of this subtitle, the Secretary shall publish a notice in the Federal Register to inform dairy producers of the availability of retroactive basic margin protection and retroactive supplemental margin protection, subject to the condition that interested producers must file a notice of intent (in such form and manner as the Secretary specifies in the Federal Register notice)—

(A)

to participate in the margin protection program and receive basic margin protection; and

(B)

at the election of the producer under paragraph (3), to also obtain supplemental margin protection.

(2)

Retroactive basic margin protection

(A)

Availability

If a dairy producer files a notice of intent under paragraph (1) to participate in the margin protection program before the initiation of the sign-up period for the margin protection program and subsequently signs up for the margin protection program, the producer shall receive basic margin protection retroactive to the effective date of this subtitle.

(B)

Duration

Retroactive basic margin protection under this paragraph for a dairy producer shall apply from the effective date of this subtitle until the date on which the producer signs up for the margin protection program.

(3)

Retroactive supplemental margin protection

(A)

Availability

Subject to subparagraphs (B) and (C), if a dairy producer files a notice of intent under paragraph (1) to participate in the margin protection program and obtain supplemental margin protection and subsequently signs up for the margin protection program, the producer shall receive supplemental margin protection, in addition to the basic margin protection under paragraph (2), retroactive to the effective date of this subtitle.

(B)

Deadline for submission

A notice of intent to obtain retroactive supplemental margin protection must be filed with the Secretary no later than the earlier of the following:

(i)

150 days after the date on which the Secretary publishes the notice in the Federal Register required by paragraph (1).

(ii)

The date on which the Secretary initiates the sign up period for the margin protection program.

(C)

Election of coverage level and percentage of coverage

To be sufficient to obtain retroactive supplemental margin protection, the notice of intent to participate filed by a dairy producer must specify—

(i)

a selected coverage level that is higher, in any increment of $0.50, than the payment threshold for basic margin protection specified in section 1414(b), but not to exceed $6.00; and

(ii)

the percentage of coverage, subject to limits imposed in section 1415(c).

(D)

Duration

The coverage level and percentage specified in the notice of intent to participate filed by a dairy producer shall apply from the effective date of this subtitle until the later of the following:

(i)

October 1, 2013.

(ii)

The date on which the Secretary initiates the sign-up period for the margin protection program.

(4)

Notice of intent and obligation to participate in margin protection program

In no way does filing a notice of intent under this subsection obligate a dairy producer to sign up for the margin protection program once the program rules are final, but if a producer does file a notice of intent and subsequently signs up for the margin protection program, that dairy producer is obligated to pay fees and premiums for any retroactive basic margin protection or retroactive supplemental margin protection selected in the notice of intent.

(e)

Administrative fee

(1)

Administrative fee required

A dairy producer shall pay an administrative fee under this subsection to sign up to participate in the margin protection program. The participating dairy producer shall pay the administrative fee annually thereafter to continue to participate in the margin protection program.

(2)

Fee amount

The administrative fee for a participating dairy producer for a calendar year is based on the pounds of milk (in millions) marketed by the dairy producer in the previous calendar year, as follows:

Pounds Marketed (in millions)

Admin. Fee

less than 1

$100

1 to 10

$250

more than 10 to 40

$500

more than 40

$1000

(3)

Deposit of Fees

All administrative fees collected under this subsection shall be credited to the fund or account used to cover the costs incurred to administer the margin protection program and the stabilization program and shall be available to the Secretary, without further appropriation and until expended, for use or transfer as provided in paragraph (4).

(4)

Use of Fees

The Secretary shall use administrative fees collected under this subsection—

(A)

to cover administrative costs of the margin protection program and stabilization program; and

(B)

to the extent funds remain available after operation of subparagraphs (A), to cover costs of the Department of Agriculture relating to reporting of dairy market news and to carry out section 273 of the Agricultural Marketing Act of 1946 (7 U.S.C. 1637b).

(f)

Reconstitution

The Secretary shall prohibit a dairy producer from reconstituting a dairy operation for the sole purpose of the dairy producer—

(1)

receiving basic margin protection;

(2)

purchasing supplemental margin protection; or

(3)

avoiding participation in the stabilization program.

(g)

Priority consideration

A dairy operation that participates in the margin protection program shall be eligible to participate in the livestock gross margin for dairy program under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) only after operations that are not participating in the production margin protection program are enrolled.

1413.

Production history of participating dairy producers

(a)

Production history for basic margin protection

(1)

Determination required

For purposes of providing basic margin protection, the Secretary shall determine the basic production history of the dairy operation of each participating dairy producer in the margin protection program.

(2)

Calculation

Except as provided in paragraph (3), the basic production history of a participating dairy producer for basic margin protection is equal to the highest annual milk marketings of the dairy producer during any one of the three calendar years immediately preceding the calendar year in which the dairy producer first signed up to participate in the margin protection program.

(3)

Election by new producers

If a participating dairy producer has been in operation for less than a year, the dairy producer shall elect one of the following methods for the Secretary to determine the basic production history of the dairy producer:

(A)

The volume of the actual milk marketings for the months the dairy producer has been in operation extrapolated to a yearly amount.

(B)

An estimate of the actual milk marketings of the dairy producer based on the herd size of the producer relative to the national rolling herd average data published by the Secretary.

(4)

No change in production history for basic margin protection

Once the basic production history of a participating dairy producer is determined under paragraph (2) or (3), the basic production history shall not be subsequently changed for purposes of determining the amount of any basic margin protection payments for the dairy producer made under section 1414.

(b)

Annual production history for supplemental margin protection

(1)

Determination required

For purposes of providing supplemental margin protection for a participating dairy producer that purchases supplemental margin protection for a year under section 1415, the Secretary shall determine the annual production history of the dairy operation of the dairy producer under paragraph (2).

(2)

Calculation

The annual production history of a participating dairy producer for a year is equal to the actual milk marketings of the dairy producer during the preceding calendar year.

(3)

New producers

Subsection (a)(3) shall apply with respect to determining the annual production history of a participating dairy producer that has been in operation for less than a year.

(c)

Required information

A participating dairy producer shall provide all information that the Secretary may require in order to establish—

(1)

the basic production history of the dairy operation of the dairy producer under subsection (a); and

(2)

the production history of the dairy operation of the dairy producer whenever the producer purchases supplemental margin protection under section 1415.

(d)

Transfer of production histories

(1)

Transfer by sale or lease

In promulgating the rules to initiate the margin protection program, the Secretary shall specify the conditions under which and the manner by which the production history of a dairy operation may be transferred by sale or lease.

(2)

Coverage level

(A)

Basic margin protection

A purchaser or lessee to whom the Secretary transfers a basic production history under this subsection shall not obtain a different level of basic margin protection than the basic margin protection coverage held by the seller or lessor from whom the transfer was obtained.

(B)

Supplemental margin protection

A purchaser or lessee to whom the Secretary transfers an annual production history under this subsection shall not obtain a different level of supplemental margin protection coverage than the supplemental margin protection coverage in effect for the seller or lessor from whom the transfer was obtained for the calendar year in which the transfer was made.

(e)

Movement and transfer of production history

(1)

Movement and transfer authorized

Subject to paragraph (2), if a dairy producer moves from one location to another location, the dairy producer may maintain the basic production history and annual production history associated with the operation.

(2)

Notification requirement

A dairy producer shall notify the Secretary of any move of a dairy operation under paragraph (1).

(3)

Subsequent occupation of vacated location

A party subsequently occupying a dairy operation location vacated as described in paragraph (1) shall have no interest in the basic production history or annual production history previously associated with the operation at such location.

1414.

Basic margin protection

(a)

Eligibility

All participating dairy producers are eligible to receive basic margin protection under the margin protection program.

(b)

Payment threshold

Participating dairy producers shall receive a basic margin protection payment whenever the average actual dairy producer margin for a consecutive two-month period is less than $4.00 per hundredweight of milk.

(c)

Basic margin protection payment

(1)

Payment required

The Secretary shall make a basic margin protection payment to each participating dairy producer whenever such a payment is required by subsection (b).

(2)

Amount of payment

The basic margin protection payment for the dairy operation of a participating dairy producer for a consecutive two-month period shall be determined as follows:

(A)

The Secretary shall calculate the difference between the average actual dairy producer margin for the consecutive two-month period and $4.00, except that, if the difference is more than $4.00, the Secretary shall use $4.00.

(B)

The Secretary shall multiply the amount under subparagraph (A) by the lesser of the following:

(i)

80 percent of the production history of the dairy producer, divided by six.

(ii)

The actual amount of milk marketed by the dairy operation of the dairy producer during the consecutive two-month period.

1415.

Supplemental margin protection

(a)

Election of supplemental margin protection

Supplemental margin protection is available only on an annual basis. A participating dairy producer may annually purchase supplemental margin protection to protect, during the calendar year for which purchased, a higher level of the income of a participating dairy producer than the income level guaranteed by basic margin protection under section 1414.

(b)

Selection of payment threshold

A participating dairy producer purchasing supplemental margin protection for a year shall elect a coverage level that is higher, in any increment of $0.50, than the payment threshold for basic margin protection specified in section 1414(b), but not to exceed $8.00.

(c)

Selection of coverage percentage

A participating dairy producer purchasing supplemental margin protection for a year shall elect a percentage of coverage equal to not more than 90 percent, nor less than 25 percent, of the annual production history of the dairy operation of the participating dairy producer.

the premium per hundredweight of milk, as specified in the applicable table under paragraph (2) or (3).

(2)

Premium per hundredweight for first 4 million pounds of production

For the first 4,000,000 pounds of milk marketings included in the annual production history of a participating dairy producer, the premium per hundredweight corresponding to each coverage level specified in the following table is as follows:

Coverage Level

Premium per Cwt.

$4.50

$0.01

$5.00

$0.025

$5.50

$0.04

$6.00

$0.065

$6.50

$0.09

$7.00

$0.434

$7.50

$0.590

$8.00

$0.922

(3)

Premium per hundredweight for production in excess of 4 million pounds

For milk marketings in excess of 4,000,000 pounds included in the annual production history of a participating dairy producer, the premium per hundredweight corresponding to each coverage level is as follows:

Coverage Level

Premium per Cwt.

$4.50

$0.015

$5.00

$0.036

$5.50

$0.081

$6.00

$0.155

$6.50

$0.230

$7.00

$0.434

$7.50

$0.590

$8.00

$0.922

(4)

Time for payment

In promulgating the rules to initiate the margin protection program, the Secretary shall provide more than one method by which a participating dairy producer that purchases supplemental margin protection for a calendar year may pay the premium under this subsection for that year that maximizes producer payment flexibility and program integrity.

(e)

Producer’s Premium Obligations

(1)

Pro-ration of premium for new producers

A dairy producer described in section 1412(c)(2) that purchases supplemental margin protection for a calendar year after the start of the calendar year shall pay a pro-rated premium for that calendar year based on the portion of the calendar year for which the producer purchases the coverage.

(2)

Legal obligation

A participating dairy producer that purchases supplemental margin protection for a calendar year shall be legally obligated to pay the applicable premium for that calendar year, except that, if the dairy producer retires, the producer may request that Secretary cancel the supplemental margin protection if the producer has terminated the dairy operation entirely and certifies under oath that the producer will not be actively engaged in any dairy operation for at least the next seven years.

(f)

Supplemental Payment threshold

A participating dairy producer with supplemental margin protection shall receive a supplemental margin protection payment whenever the average actual dairy producer margin for a consecutive two-month period is less than the coverage level threshold selected by the dairy producer under subsection (b).

(g)

Supplemental margin protection payments

(1)

In general

The supplemental margin protection payment for a participating dairy producer is in addition to the basic margin protection payment.

(2)

Amount of payment

The supplemental margin protection payment for the dairy operation of a participating dairy producer shall be determined as follows:

(A)

The Secretary shall calculate the difference between the coverage level threshold selected by the dairy producer under subsection (b) and the greater of—

(i)

the average actual dairy producer margin for the consecutive two-month period; or

(ii)

$4.00.

(B)

The amount determined under subparagraph (A) shall be multiplied by the percentage selected by the participating dairy producer under subsection (c) and by the lesser of the following:

(i)

The annual production history of the dairy operation of the dairy producer, divided by six.

(ii)

The actual amount of milk marketed by the dairy operation of the dairy producer during the consecutive two-month period.

1416.

Effect of failure to pay administrative fees or premiums

(a)

Loss of benefits

A participating dairy producer that fails to pay the required administrative fee under section 1412 or is in arrears on premium payments for supplemental margin protection under section 1415—

(1)

remains legally obligated to pay the administrative fee or premiums, as the case may be; and

(2)

may not receive basic margin protection payments or supplemental margin protection payments until the fees or premiums are fully paid.

(b)

Enforcement

The Secretary may take such action as necessary to collect administrative fees and premium payments for supplemental margin protection.

B

Dairy Market Stabilization Program

1431.

Establishment of dairy market stabilization program

(a)

Program required; purpose

The Secretary shall establish and administer a dairy market stabilization program applicable to participating dairy producers for the purpose of assisting in balancing the supply of milk with demand when dairy producers are experiencing low or negative operating margins.

(b)

Election of stabilization program base calculation method

(1)

Election

When a dairy producer signs up under section 1412 to participate in the margin protection program, the dairy producer shall inform the Secretary of the method by which the stabilization program base for the dairy producer for fiscal year 2013 will be calculated under paragraph (3).

(2)

Change in calculation method

A participating dairy producer may change the stabilization program base calculation method to be used for a calendar year by notifying the Secretary of the change not later than a date determined by the Secretary.

(3)

Calculation methods

A participating dairy producer may elect either of the following methods for calculation of the stabilization program base for the producer:

(A)

The volume of the average monthly milk marketings of the dairy producer for the three months immediately preceding the announcement by the Secretary that the stabilization program will become effective.

(B)

The volume of the monthly milk marketings of the dairy producer for the same month in the preceding year as the month for which the Secretary has announced the stabilization program will become effective.

1432.

Threshold for implementation and reduction in dairy producer payments

(a)

When stabilization program required

Except as provided in subsection (b), the Secretary shall announce that the stabilization program is in effect and order reduced payments for any participating dairy producer that exceeds the applicable percentage of the producer’s stabilization program base whenever—

(1)

the actual dairy producer margin has been $6.00 or less per hundredweight of milk for each of the immediately preceding two months; or

(2)

the actual dairy producer margin has been $4.00 or less per hundredweight of milk for the immediately preceding month.

(b)

Exception

The Secretary shall not make the announcement under subsection (a) to implement the stabilization program or order reduced payments if any of the conditions described in section 1436(b) have been met during the two months immediately preceding the month in which the announcement under subsection (a) would otherwise be made by the Secretary in the absence of this exception.

(c)

Effective date for implementation of payment reductions

Reductions in dairy producer payments shall commence beginning on the first day of the month immediately following the date of the announcement by the Secretary under subsection (a).

1433.

Producer milk marketing information

(a)

Collection of milk marketing data

The Secretary shall establish, by regulation, a process to collect from participating dairy producers and handlers such information that the Secretary considers necessary for each month during which the stabilization program is in effect.

(b)

Reduce regulatory burden

When implementing the process under subsection (a), the Secretary shall minimize the regulatory burden on dairy producers and handlers.

1434.

Calculation and collection of reduced dairy producer payments

(a)

Reduced producer payments required

During any month in which payment reductions are in effect under the stabilization program, each handler shall reduce payments to each participating dairy producer from whom the handler receives milk.

(b)

Reductions based on actual dairy producer margin

(1)

Reduction requirement 1

Unless the reduction required by paragraph (2) or (3) applies, when the actual dairy producer margin has been $6.00 or less per hundredweight of milk for two consecutive months, the handler shall make payments to a participating dairy producer for a month based on the greater of the following:

(A)

98 percent of the stabilization program base of the dairy producer.

(B)

94 percent of the marketings of milk for the month by the producer.

(2)

Reduction requirement 2

Unless the reduction required by paragraph (3) applies, when the actual dairy producer margin has been $5.00 or less per hundredweight of milk for two consecutive months, the handler shall make payments to a participating dairy producer for a month based on the greater of the following:

(A)

97 percent of the stabilization program base of the dairy producer.

(B)

93 percent of the marketings of milk for the month by the producer.

(3)

Reduction requirement 3

When the actual dairy producer margin has been $4.00 or less for any one month, the handler shall make payments to a participating dairy producer for a month based on the greater of the following:

(A)

96 percent of the stabilization program base of the dairy producer.

(B)

92 percent of the marketings of milk for the month by the producer.

(c)

Continuation of reductions

The largest level of payment reduction required under paragraph (1), (2), or (3) of subsection (b) shall be continued for each month until the Secretary suspends the stabilization program and terminates payment reductions in accordance with section 1436.

(d)

Payment reduction exception

Notwithstanding any preceding subsection of this section, a handler shall make no payment reductions for a dairy producer for a month if the producer’s milk marketings for the month are equal to or less than the percentage of the stabilization program base applicable to the producer under paragraph (1), (2), or (3) of subsection (b).

1435.

Remitting monies to the Secretary and use of monies

(a)

Remitting monies

As soon as practicable after the end of each month during which payment reductions are in effect under the stabilization program, each handler shall remit to the Secretary an amount equal to the amount by which payments to participating dairy producers are reduced by the handler under section 1434.

(b)

Deposit of monies

All monies received under subsection (a) shall be available to the Secretary, without further appropriation and until expended, for use or transfer as provided in subsection (c).

(c)

Use of monies

(1)

Availability for certain commodity donations

Within three months of the receipt of monies under subsection (a), the Secretary shall obligate the monies for the purpose of—

(A)

purchasing dairy products for donation to food banks and other programs that the Secretary determines appropriate; and

(B)

expanding consumption and building demand for dairy products.

(2)

No duplication of effort

The Secretary shall ensure that expenditures under paragraph (1) are compatible with, and do not duplicate, programs supported by the dairy research and promotion activities conducted under the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4501 et seq.).

(3)

Accounting

The Secretary shall keep an accurate account of all monies obligated under paragraph (1).

(d)

Annual Report

Not later than December 31 of each year that the stabilization program is in effect, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report that provides an accurate accounting of—

(1)

the monies received by the Secretary during the preceding fiscal year under subsection (a); and

(2)

all expenditures made by the Secretary under subsection (b) during the preceding fiscal year.

(e)

Enforcement

If a participating dairy producer or handler fails to remit or collect the amounts by which payments to participating dairy producers are reduced under section 1434, the producer or handler responsible for the failure shall be liable to the Secretary for the amount that should have been remitted or collected, plus interest. In addition to the enforcement authorities available under section 1437, the Secretary may enforce this subsection in the courts of the United States.

1436.

Suspension of reduced payment requirement

(a)

Determination of prices

For purposes of this section:

(1)

The price in the United States for cheddar cheese and nonfat dry milk shall be determined by the Secretary.

(2)

The world price of cheddar cheese and skim milk powder shall be determined by the Secretary.

(b)

Initial suspension thresholds

The Secretary shall announce that the stabilization program shall be suspended whenever the Secretary determines that—

(1)

the actual dairy producer margin is greater than $6.00 per hundredweight of milk for two consecutive months;

(2)

the dairy producer margin is equal to or less than $6.00 (but greater than $5.00) for two consecutive months, and during the same two consecutive months—

(A)

the price in the United States for cheddar cheese is equal to or greater than the world price of cheddar cheese; or

(B)

the price in the United States for nonfat dry milk is equal to or greater than the world price of skim milk powder;

(3)

the dairy producer margin is equal to or less than $5.00 (but greater than $4.00) for two consecutive months, and during the same two consecutive months—

(A)

the price in the United States for cheddar cheese is more than 5 percent above the world price of cheddar cheese; or

(B)

the price in the United States for nonfat dry milk is more than 5 percent above the world price of skim milk powder; or

(4)

the dairy producer margin is equal to or less than $4.00 for two consecutive months, and during the same two consecutive months—

(A)

the price in the United States for cheddar cheese is more than 7 percent above the world price of cheddar cheese; or

(B)

the price in the United States for nonfat dry milk is more than 7 percent above the world price of skim milk powder.

(c)

Enhanced suspension thresholds

If the stabilization program is not suspended pursuant to subsection (b) for six consecutive months or more, the stabilization program shall be suspended whenever the Secretary determines that—

(1)

the actual dairy producer margin is greater than $6.00 per hundredweight of milk for two consecutive months;

(2)

the dairy producer margin is equal to or less than $6.00 (but greater than $5.00) for two consecutive months, and during the same two consecutive months—

(A)

the price in the United States for cheddar cheese is not less than 97 percent of the world price of cheddar cheese; or

(B)

the price in the United States for non-fat dry milk is not less than 97 percent of the world price of skim milk powder;

(3)

the dairy producer margin is equal to or less than $5.00 (but greater than $4.00) for two consecutive months, and during the same two consecutive months—

(A)

the price in the United States for cheddar cheese is more than 3 percent above the world price of cheddar cheese; or

(B)

the price in the United States for non fat dry milk is more than 3 percent above the world price of skim milk powder; or

(4)

the dairy producer margin is equal to or less than $4.00 for two consecutive months, and during the same two consecutive months—

(A)

the price in the United States for cheddar cheese is more than 6 percent above the world price of cheddar cheese; or

(B)

the price in the United States for non fat dry milk is more than 6 percent above the world price of skim milk powder.

(d)

Implementation by handlers

Effective on the day after the date of the announcement by the Secretary under subsection (b) or (c) of the suspension of the stabilization program, the handler shall cease reducing payments to participating dairy producers under the stabilization program.

(e)

Condition on resumption of stabilization program

Upon the announcement by the Secretary under subsection (b) or (c) that the stabilization program has been suspended, the stabilization program may not be implemented again until, at the earliest—

(1)

two months have passed, beginning on the first day of the month immediately following the announcement by the Secretary; and

(2)

the conditions of section 1432(a) are again met.

1437.

Enforcement

(a)

Unlawful act

It shall be unlawful and a violation of the this subpart for any person subject to the stabilization program to willfully fail or refuse to provide, or delay the timely reporting of, accurate information and remittance of funds to the Secretary in accordance with this subpart.

(b)

Order

After providing notice and opportunity for a hearing to an affected person, the Secretary may issue an order against any person to cease and desist from continuing any violation of this subpart.

(c)

Appeal

An order of the Secretary under subsection (b) shall be final and conclusive unless an affected person files an appeal of the order of the Secretary in United States district court not later than 30 days after the date of the issuance of the order. A finding of the Secretary in the order shall be set aside only if the finding is not supported by substantial evidence.

(d)

Noncompliance with order

If a person subject to this subpart fails to obey an order issued under subsection (b) after the order has become final and unappealable, or after the appropriate United States district court has entered a final judgment in favor of the Secretary, the United States may apply to the appropriate United States district court for enforcement of the order. If the court determines that the order was lawfully made and duly served and that the person violated the order, the court shall enforce the order.

1438.

Audit requirements

(a)

Audits of producer and handler compliance

(1)

Audits authorized

If determined by the Secretary to be necessary to ensure compliance by participating dairy producers and handlers with the stabilization program, the Secretary may conduct periodic audits of participating dairy producers and handlers.

(2)

Sample of dairy producers

Any audit conducted under this subsection shall include, at a minimum, investigation of a statistically valid and random sample of participating dairy producers.

(b)

Submission of results

The Secretary shall submit the results of any audit conducted under subsection (a) to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate and include such recommendations as the Secretary considers appropriate regarding the stabilization program.

C

Commodity Credit Corporation

1451.

Use of Commodity Credit Corporation

The Secretary shall use the funds, facilities, and the authorities of the Commodity Credit Corporation to carry out this part.

D

Initiation and duration

1461.

Rulemaking

(a)

Procedure

The promulgation of regulations for the initiation of the margin protection program and the stabilization program, and for administration of such programs, shall be made without regard to—

Section 143(a)(2) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7253(a)(2)) is amended by adding at the end the following new sentence: Subsection (b)(2) does not apply to the authority of the Secretary under this subsection..

1462.

Duration

The margin protection program and the stabilization program shall end on December 31, 2018.

II

Repeal or reauthorization of other dairy-related provisions

1481.

Repeal of dairy product price support and milk income loss contract programs

(a)

Repeal of dairy product price support program

Section 1501 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8771) is repealed.

(b)

Repeal of milk income loss contract program

Section 1506 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) is repealed.

This subtitle and the amendments made by this subtitle shall take effect on October 1, 2013.

E

Supplemental Agricultural Disaster Assistance Programs

1501.

Supplemental agricultural disaster assistance

(a)

Definitions

In this section:

(1)

Eligible producer on a farm

(A)

In general

The term eligible producer on a farm means an individual or entity described in subparagraph (B) that, as determined by the Secretary, assumes the production and market risks associated with the agricultural production of crops or livestock.

(B)

Description

An individual or entity referred to in subparagraph (A) is—

(i)

a citizen of the United States;

(ii)

a resident alien;

(iii)

a partnership of citizens of the United States; or

(iv)

a corporation, limited liability corporation, or other farm organizational structure organized under State law.

(2)

Farm-raised fish

The term farm-raised fish means any aquatic species that is propagated and reared in a controlled environment.

(3)

Livestock

The term livestock includes—

(A)

cattle (including dairy cattle);

(B)

bison;

(C)

poultry;

(D)

sheep;

(E)

swine;

(F)

horses; and

(G)

other livestock, as determined by the Secretary.

(4)

Secretary

The term Secretary means the Secretary of Agriculture.

(b)

Livestock indemnity payments

(1)

Payments

For each of the fiscal years 2012 through 2018, the Secretary shall use such sums as are necessary of the funds of the Commodity Credit Corporation to make livestock indemnity payments to eligible producers on farms that have incurred livestock death losses in excess of the normal mortality, as determined by the Secretary, due to—

(A)

attacks by animals reintroduced into the wild by the Federal Government or protected by Federal law, including wolves and avian predators; or

(B)

adverse weather, as determined by the Secretary, during the calendar year, including losses due to hurricanes, floods, blizzards, disease, wildfires, extreme heat, and extreme cold.

(2)

Payment rates

Indemnity payments to an eligible producer on a farm under paragraph (1) shall be made at a rate of 75 percent of the market value of the applicable livestock on the day before the date of death of the livestock, as determined by the Secretary.

(3)

Special rule for payments made due to disease

The Secretary shall ensure that payments made to an eligible producer under paragraph (1) are not made for the same livestock losses for which compensation is provided pursuant to section 10407(d) of the Animal Health Protection Act (7 U.S.C. 8306(d)).

(c)

Livestock forage disaster program

(1)

Definitions

In this subsection:

(A)

Covered livestock

(i)

In general

Except as provided in clause (ii), the term covered livestock means livestock of an eligible livestock producer that, during the 60 days prior to the beginning date of a qualifying drought or fire condition, as determined by the Secretary, the eligible livestock producer—

(I)

owned;

(II)

leased;

(III)

purchased;

(IV)

entered into a contract to purchase;

(V)

is a contract grower; or

(VI)

sold or otherwise disposed of due to qualifying drought conditions during—

(aa)

the current production year; or

(bb)

subject to paragraph (3)(B)(ii), 1 or both of the 2 production years immediately preceding the current production year.

(ii)

Exclusion

The term covered livestock does not include livestock that were or would have been in a feedlot, on the beginning date of the qualifying drought or fire condition, as a part of the normal business operation of the eligible livestock producer, as determined by the Secretary.

(B)

Drought monitor

The term drought monitor means a system for classifying drought severity according to a range of abnormally dry to exceptional drought, as defined by the Secretary.

(C)

Eligible livestock producer

(i)

In general

The term eligible livestock producer means an eligible producer on a farm that—

(I)

is an owner, cash or share lessee, or contract grower of covered livestock that provides the pastureland or grazing land, including cash-leased pastureland or grazing land, for the livestock;

(II)

provides the pastureland or grazing land for covered livestock, including cash-leased pastureland or grazing land that is physically located in a county affected by drought;

(III)

certifies grazing loss; and

(IV)

meets all other eligibility requirements established under this subsection.

(ii)

Exclusion

The term eligible livestock producer does not include an owner, cash or share lessee, or contract grower of livestock that rents or leases pastureland or grazing land owned by another person on a rate-of-gain basis.

(D)

Normal carrying capacity

The term normal carrying capacity, with respect to each type of grazing land or pastureland in a county, means the normal carrying capacity, as determined under paragraph (3)(D)(i), that would be expected from the grazing land or pastureland for livestock during the normal grazing period, in the absence of a drought or fire that diminishes the production of the grazing land or pastureland.

(E)

Normal grazing period

The term normal grazing period, with respect to a county, means the normal grazing period during the calendar year for the county, as determined under paragraph (3)(D)(i).

(2)

Program

For each of the fiscal years 2012 through 2018, the Secretary shall use such sums as are necessary of the funds of the Commodity Credit Corporation to provide compensation for losses to eligible livestock producers due to grazing losses for covered livestock due to—

(A)

a drought condition, as described in paragraph (3); or

(B)

fire, as described in paragraph (4).

(3)

Assistance for losses due to drought conditions

(A)

Eligible losses

(i)

In general

An eligible livestock producer may receive assistance under this subsection only for grazing losses for covered livestock that occur on land that—

(I)

is native or improved pastureland with permanent vegetative cover; or

(II)

is planted to a crop planted specifically for the purpose of providing grazing for covered livestock.

(ii)

Exclusions

An eligible livestock producer may not receive assistance under this subsection for grazing losses that occur on land used for haying or grazing under the conservation reserve program established under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.).

(B)

Monthly payment rate

(i)

In general

Except as provided in clause (ii), the payment rate for assistance under this paragraph for 1 month shall, in the case of drought, be equal to 60 percent of the lesser of—

(I)

the monthly feed cost for all covered livestock owned or leased by the eligible livestock producer, as determined under subparagraph (C); or

(II)

the monthly feed cost calculated by using the normal carrying capacity of the eligible grazing land of the eligible livestock producer.

(ii)

Partial compensation

In the case of an eligible livestock producer that sold or otherwise disposed of covered livestock due to drought conditions in 1 or both of the 2 production years immediately preceding the current production year, as determined by the Secretary, the payment rate shall be 80 percent of the payment rate otherwise calculated in accordance with clause (i).

in the case of any other type of weight of livestock, an amount determined by the Secretary that represents the average number of pounds of corn per day necessary to feed the livestock.

(iii)

Corn price per pound

For purposes of clause (i)(III), the corn price per pound shall equal the quotient obtained by dividing—

(I)

the higher of—

(aa)

the national average corn price per bushel for the 12-month period immediately preceding March 1 of the year for which the disaster assistance is calculated; or

(bb)

the national average corn price per bushel for the 24-month period immediately preceding that March 1; by

(II)

56.

(D)

Normal grazing period and drought monitor intensity

(i)

Fsa county committee determinations

(I)

In general

The Secretary shall determine the normal carrying capacity and normal grazing period for each type of grazing land or pastureland in the county served by the applicable committee.

(II)

Changes

No change to the normal carrying capacity or normal grazing period established for a county under subclause (I) shall be made unless the change is requested by the appropriate State and county Farm Service Agency committees.

(ii)

Drought intensity

(I)

D2

An eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated by the U.S. Drought Monitor as having a D2 (severe drought) intensity in any area of the county for at least 8 consecutive weeks during the normal grazing period for the county, as determined by the Secretary, shall be eligible to receive assistance under this paragraph in an amount equal to 1 monthly payment using the monthly payment rate determined under subparagraph (B).

(II)

D3

An eligible livestock producer that owns or leases grazing land or pastureland that is physically located in a county that is rated by the U.S. Drought Monitor as having at least a D3 (extreme drought) intensity in any area of the county at any time during the normal grazing period for the county, as determined by the Secretary, shall be eligible to receive assistance under this paragraph—

(aa)

in an amount equal to 3 monthly payments using the monthly payment rate determined under subparagraph (B);

(bb)

if the county is rated as having a D3 (extreme drought) intensity in any area of the county for at least 4 weeks during the normal grazing period for the county, or is rated as having a D4 (exceptional drought) intensity in any area of the county at any time during the normal grazing period, in an amount equal to 4 monthly payments using the monthly payment rate determined under subparagraph (B); or

(cc)

if the county is rated as having a D4 (exceptional drought) intensity in any area of the county for at least 4 weeks during the normal grazing period, in an amount equal to 5 monthly payments using the monthly rate determined under subparagraph (B).

(4)

Assistance for losses due to fire on public managed land

(A)

In general

An eligible livestock producer may receive assistance under this paragraph only if—

(i)

the grazing losses occur on rangeland that is managed by a Federal agency; and

(ii)

the eligible livestock producer is prohibited by the Federal agency from grazing the normal permitted livestock on the managed rangeland due to a fire.

(B)

Payment rate

The payment rate for assistance under this paragraph shall be equal to 50 percent of the monthly feed cost for the total number of livestock covered by the Federal lease of the eligible livestock producer, as determined under paragraph (3)(C).

(C)

Payment duration

(i)

In general

Subject to clause (ii), an eligible livestock producer shall be eligible to receive assistance under this paragraph for the period—

(I)

beginning on the date on which the Federal agency excludes the eligible livestock producer from using the managed rangeland for grazing; and

(II)

ending on the last day of the Federal lease of the eligible livestock producer.

(ii)

Limitation

An eligible livestock producer may only receive assistance under this paragraph for losses that occur on not more than 180 days per year.

(5)

No duplicative payments

An eligible livestock producer may elect to receive assistance for grazing or pasture feed losses due to drought conditions under paragraph (3) or fire under paragraph (4), but not both for the same loss, as determined by the Secretary.

(d)

Emergency assistance for livestock, honey bees, and farm-raised fish

(1)

In general

For each of the fiscal years 2012 through 2018, the Secretary shall use not more than $20,000,000 of the funds of the Commodity Credit Corporation to provide emergency relief to eligible producers of livestock, honey bees, and farm-raised fish to aid in the reduction of losses due to disease (including cattle tick fever), adverse weather, or other conditions, such as blizzards and wildfires, as determined by the Secretary, that are not covered under subsection (b) or (c).

(2)

Use of funds

Funds made available under this subsection shall be used to reduce losses caused by feed or water shortages, disease, or other factors as determined by the Secretary.

(3)

Availability of funds

Any funds made available under this subsection shall remain available until expended.

(e)

Tree assistance program

(1)

Definitions

In this subsection:

(A)

Eligible orchardist

The term eligible orchardist means a person that produces annual crops from trees for commercial purposes.

(B)

Natural disaster

The term natural disaster means plant disease, insect infestation, drought, fire, freeze, flood, earthquake, lightning, or other occurrence, as determined by the Secretary.

(C)

Nursery tree grower

The term nursery tree grower means a person who produces nursery, ornamental, fruit, nut, or Christmas trees for commercial sale, as determined by the Secretary.

(D)

Tree

The term tree includes a tree, bush, and vine.

(2)

Eligibility

(A)

Loss

Subject to subparagraph (B), for each of the fiscal years 2012 through 2018, the Secretary shall use such sums as are necessary of the funds of the Commodity Credit Corporation to provide assistance—

(i)

under paragraph (3) to eligible orchardists and nursery tree growers that planted trees for commercial purposes but lost the trees as a result of a natural disaster, as determined by the Secretary; and

(ii)

under paragraph (3)(B) to eligible orchardists and nursery tree growers that have a production history for commercial purposes on planted or existing trees but lost the trees as a result of a natural disaster, as determined by the Secretary.

(B)

Limitation

An eligible orchardist or nursery tree grower shall qualify for assistance under subparagraph (A) only if the tree mortality of the eligible orchardist or nursery tree grower, as a result of damaging weather or related condition, exceeds 15 percent (adjusted for normal mortality).

(3)

Assistance

Subject to paragraph (4), the assistance provided by the Secretary to eligible orchardists and nursery tree growers for losses described in paragraph (2) shall consist of—

(A)(i)

reimbursement of 65 percent of the cost of replanting trees lost due to a natural disaster, as determined by the Secretary, in excess of 15 percent mortality (adjusted for normal mortality); or

(ii)

at the option of the Secretary, sufficient seedlings to reestablish a stand; and

(B)

reimbursement of 50 percent of the cost of pruning, removal, and other costs incurred by an eligible orchardist or nursery tree grower to salvage existing trees or, in the case of tree mortality, to prepare the land to replant trees as a result of damage or tree mortality due to a natural disaster, as determined by the Secretary, in excess of 15 percent damage or mortality (adjusted for normal tree damage and mortality).

(4)

Limitations on assistance

(A)

Definitions of legal entity and person

In this paragraph, the terms legal entity and person have the meaning given those terms in section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a)).

(B)

Amount

The total amount of payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this subsection may not exceed $125,000 for any crop year, or an equivalent value in tree seedlings.

(C)

Acres

The total quantity of acres planted to trees or tree seedlings for which a person or legal entity shall be entitled to receive payments under this subsection may not exceed 500 acres.

(f)

Payment limitations

(1)

Definitions of legal entity and person

In this subsection, the terms legal entity and person have the meaning given those terms in section 1001(a) of the Food Security Act of 1985 (7 U.S.C. 1308(a)).

(2)

Amount

The total amount of disaster assistance payments received, directly or indirectly, by a person or legal entity (excluding a joint venture or general partnership) under this section (excluding payments received under subsection (e)) may not exceed $125,000 for any crop year.

(3)

Direct attribution

Subsections (e) and (f) of section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) or any successor provisions relating to direct attribution shall apply with respect to assistance provided under this section.

F

Administration

1601.

Administration generally

(a)

Use of Commodity Credit Corporation

The Secretary of Agriculture shall use the funds, facilities, and authorities of the Commodity Credit Corporation to carry out this title.

(b)

Determinations by Secretary

A determination made by the Secretary under this title shall be final and conclusive.

(c)

Regulations

(1)

In general

Except as otherwise provided in this subsection, not later than 90 days after the date of enactment of this Act, the Secretary and the Commodity Credit Corporation, as appropriate, shall promulgate such regulations as are necessary to implement this title and the amendments made by this title.

(2)

Procedure

The promulgation of the regulations and administration of this title and the amendments made by this title and sections 11003 and 11016 of this Act shall be made without regard to—

If the Secretary determines that expenditures under this title that are subject to the total allowable domestic support levels under the Uruguay Round Agreements (as defined in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501)) will exceed the allowable levels for any applicable reporting period, the Secretary shall, to the maximum extent practicable, make adjustments in the amount of the expenditures during that period to ensure that the expenditures do not exceed the allowable levels.

(2)

Congressional notification

Before making any adjustment under paragraph (1), the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report describing the determination made under that paragraph and the extent of the adjustment to be made.

1602.

Suspension of permanent price support authority

(a)

Agricultural Adjustment Act of 1938

The following provisions of the Agricultural Adjustment Act of 1938 shall not be applicable to the 2014 through 2018 crops of covered commodities (as defined in section 1104), cotton, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act through December 31, 2018:

The following provisions of the Agricultural Act of 1949 shall not be applicable to the 2013 through 2018 crops of covered commodities (as defined in section 1104), cotton, and sugar and shall not be applicable to milk during the period beginning on the date of enactment of this Act and through December 31, 2018:

The joint resolution entitled A joint resolution relating to corn and wheat marketing quotas under the Agricultural Adjustment Act of 1938, as amended, approved May 26, 1941 (7 U.S.C. 1330, 1340), shall not be applicable to the crops of wheat planted for harvest in the calendar years 2014 through 2018.

1603.

Payment limitations

(a)

In general

Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended by striking subsections (b) and (c) and inserting the following:

(b)

Limitation on payments for covered commodities (other than peanuts)

(1)

In general

The total amount of payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) for any crop year under section 1101(c) of the Federal Agriculture Reform and Risk Management Act of 2013 and subsections (b) and (c) of section 1107 of such Act (other than peanuts) may not exceed $125,000.

(2)

Additional limitation on payments related to upland cotton

The total amount of direct payments received, directly or indirectly, by a person or legal entity (except a joint venture or a general partnership) for each of the 2014 and 2015 crop years under section 1101(c) of the Federal Agriculture Reform and Risk Management Act of 2013 may not exceed $40,000.

(c)

Limitation on payments for peanuts

The total amount of payments received, directly or indirectly, by a person or legal entity (except a joint venture or general partnership) for any crop year under subtitle A of title I of the Federal Agriculture Reform and Risk Management Act of 2013 for peanuts may not exceed $125,000.

.

(b)

Conforming amendments

(1)

Section 1001(f) of the Food Security Act of 1985 (7 U.S.C. 1308(f)) is amended by striking or title XII each place it appears in paragraphs (5)(A) and (6)(A) and inserting , title I of the Federal Agriculture Reform and Risk Management Act of 2013, or title XII.

(2)

Section 1001C(a) of the Food Security Act of 1985 (7 U.S.C. 1308–3(a)) is amended by inserting title I of the Federal Agriculture Reform and Risk Management Act of 2013, after 2008,.

(c)

Application

The amendments made by this section shall apply beginning with the 2014 crop year.

in the subsection heading, by striking Limitations and inserting Limitations on Commodity and Conservation Programs;

(2)

by striking paragraphs (1) and (2) and inserting the following new paragraphs:

(1)

Limitation

Notwithstanding any other provision of law, a person or legal entity shall not be eligible to receive any benefit described in paragraph (2) during a crop, fiscal, or program year, as appropriate, if the average adjusted gross income of the person or legal entity exceeds $950,000.

(2)

Covered benefits

Paragraph (1) applies with respect to a payment or benefit under subtitle A, B, or E of title I, or title II of the Federal Agriculture Reform and Risk Management Act of 2013, title II of the Farm Security and Rural Investment Act of 2002, title II of the Food, Conservation, and Energy Act of 2008, title XII of the Food Security Act of 1985, section 524(b) of the Federal Crop Insurance Act (7 U.S.C. 1524(b)), or section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

.

(b)

Elimination of unused definitions

Paragraph (1) of section 1001D(a) of the Food Security Act of 1985 (7 U.S.C. 1308–3a(a)) is amended to read as follows:

(1)

Average adjusted gross income

In this section, the term average adjusted gross income, with respect to a person or legal entity, means the average of the adjusted gross income or comparable measure of the person or legal entity over the 3 taxable years preceding the most immediately preceding complete taxable year, as determined by the Secretary.

Subsection (e) of section 1001D of the Food Security Act of 1985 (7 U.S.C. 1308–3a), as redesignated by subsection (c)(2) of this section, is amended by striking 2009 through 2012 and inserting 2014 through 2018.

(f)

Limitation on applicability

Section 1001(d) of the Food Security Act of 1985 (7 U.S.C. 1308) is amended by inserting before the period at the end the following: or title I of the Federal Agriculture Reform and Risk Management Act of 2013.

(g)

Transition

Section 1001D of the Food Security Act of 1985 (7 U.S.C. 1308-3a), as in effect on the day before the date of the enactment of this Act, shall apply with respect to the 2013 crop, fiscal, or program year, as appropriate, for each program described in paragraphs (1)(C) and (2)(B) of subsection (b) of that section (as so in effect on that day).

1605.

Geographically disadvantaged farmers and ranchers

Section 1621(d) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8792(d)) is amended by striking 2012 and inserting 2018.

1606.

Personal liability of producers for deficiencies

Section 164 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7284) is amended by striking and title I of the Food, Conservation, and Energy Act of 2008 each place it appears and inserting title I of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8702 et seq.), and title I of the Federal Agriculture Reform and Risk Management Act of 2013.

At least twice each year, the Secretary shall reconcile social security numbers of all individuals who receive payments under this title, whether directly or indirectly, with the Commissioner of Social Security to determined if the individuals are alive.

(b)

Preclusion

The Secretary shall preclude the issuance of payments to, and on behalf of, deceased individuals that were not eligible for payments.

1608.

Technical corrections

(a)

Missing punctuation

Section 359f(c)(1)(B) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff(c)(1)(B)) is amended by adding a period at the end.

(b)

Erroneous cross reference

(1)

Amendment

Section 1603(g) of the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1739) is amended in paragraphs (2) through (6) and the amendments made by those paragraphs by striking 1703(a) each place it appears and inserting 1603(a).

(2)

Effective date

This subsection and the amendments made by this subsection take effect as if included in the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1651).

by striking sections 1101 and 1102 of Public Law 107–171 and inserting subtitle A of title I of the Federal Agriculture Reform and Risk Management Act of 2013; and

(B)

by striking such section 1102 and inserting such subtitle; and

(2)

by striking subsection (b) and inserting the following new subsection:

(b)

This section, as amended by section 1608(c) of the Federal Agriculture Reform and Risk Management Act of 2013, shall take effect beginning with the 2014 crop year.

.

1609.

Assignment of payments

(a)

In general

The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), relating to assignment of payments, shall apply to payments made under this title.

(b)

Notice

The producer making the assignment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may require, of any assignment made under this section.

1610.

Tracking of benefits

As soon as practicable after the date of enactment of this Act, the Secretary may track the benefits provided, directly or indirectly, to individuals and entities under titles I and II and the amendments made by those titles.

1611.

Signature authority

(a)

In general

In carrying out this title and title II and amendments made by those titles, if the Secretary approves a document, the Secretary shall not subsequently determine the document is inadequate or invalid because of the lack of authority of any person signing the document on behalf of the applicant or any other individual, entity, general partnership, or joint venture, or the documents relied upon were determined inadequate or invalid, unless the person signing the program document knowingly and willfully falsified the evidence of signature authority or a signature.

(b)

Affirmation

(1)

In general

Nothing in this section prohibits the Secretary from asking a proper party to affirm any document that otherwise would be considered approved under subsection (a).

(2)

No retroactive effect

A denial of benefits based on a lack of affirmation under paragraph (1) shall not be retroactive with respect to third-party producers who were not the subject of the erroneous representation of authority, if the third-party producers—

(A)

relied on the prior approval by the Secretary of the documents in good faith; and

(B)

substantively complied with all program requirements.

1612.

Implementation

(a)

Streamlining

In implementing this title, the Secretary shall, to the maximum extent practicable—

(1)

seek to reduce administrative burdens and costs to producers by streamlining and reducing paperwork, forms, and other administrative requirements;

(2)

improve coordination, information sharing, and administrative work with the Risk Management Agency and the Natural Resources Conservation Service; and

(3)

take advantage of new technologies to enhance efficiency and effectiveness of program delivery to producers.

(b)

Maintenance of base acres and payment yields

(1)

In general

The Secretary shall maintain through September 30, 2018, for each covered commodity and upland cotton, base acres and payment yields on a farm established under—

(A)(i)

in the case of covered commodities and upland cotton, sections 1101 and 1102 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7911, 7912); and

In carrying out this paragraph, the Secretary shall use the same total base acres and payment yields established with respect to rice under sections 1108 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8718), as in effect on the day before the date of enactment of this Act, subject to any adjustment under section 1105.

(c)

Implementation

The Secretary shall make available to the Farm Service Agency to carry out this title $100,000,000.

II

Conservation

A

Conservation Reserve Program

2001.

Extension and enrollment requirements of conservation reserve program

(a)

Extension

Section 1231(a) of the Food Security Act of 1985 (16 U.S.C. 3831(a)) is amended by striking 2012 and inserting 2018.

in paragraph (1)(B), by striking the date of enactment of the Food, Conservation, and Energy Act of 2008 and inserting the date of the enactment of the Federal Agriculture Reform and Risk Management Act of 2013;

contain forbs or shrubland (including improved rangeland and pastureland) for which grazing is the predominant use;

(B)

are located in an area historically dominated by grasslands; and

(C)

could provide habitat for animal and plant populations of significant ecological value if the land is retained in its current use or restored to a natural condition;

;

(4)

in paragraph (4)(C), by striking filterstrips devoted to trees or shrubs and inserting filterstrips or riparian buffers devoted to trees, shrubs, or grasses; and

(5)

by striking paragraph (5) and inserting the following new paragraph:

(5)

the portion of land in a field not enrolled in the conservation reserve in a case in which—

(A)

more than 50 percent of the land in the field is enrolled as a buffer or filterstrip, or more than 75 percent of the land in the field is enrolled as a conservation practice other than as a buffer or filterstrip; and

(B)

the remainder of the field is—

(i)

infeasible to farm; and

(ii)

enrolled at regular rental rates.

.

(c)

Planting Status of Certain Land

Section 1231(c) of the Food Security Act of 1985 (16 U.S.C. 3831(c)) is amended by striking if and all that follows through the period at the end and inserting if, during the crop year, the land was devoted to a conserving use..

(d)

Enrollment

Subsection (d) of section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended to read as follows:

(d)

Enrollment

(1)

Maximum acreage enrolled

The Secretary may maintain in the conservation reserve at any one time during—

(A)

fiscal year 2014, no more than 27,500,000 acres;

(B)

fiscal year 2015, no more than 26,000,000 acres;

(C)

fiscal year 2016, no more than 25,000,000 acres;

(D)

fiscal year 2017, no more than 24,000,000 acres; and

(E)

fiscal year 2018, no more than 24,000,000 acres.

(2)

Grasslands

(A)

Limitation

For purposes of applying the limitations in paragraph (1), no more than 2,000,000 acres of the land described in subsection (b)(3) may be enrolled in the program at any one time during the 2014 through 2018 fiscal years.

(B)

Priority

In enrolling acres under subparagraph (A), the Secretary may give priority to land with expiring conservation reserve program contracts.

(C)

Method of enrollment

In enrolling acres under subparagraph (A), the Secretary shall make the program available to owners or operators of eligible land on a continuous enrollment basis with one or more ranking periods.

.

(e)

Duration of contract

Section 1231(e) of the Food Security Act of 1985 (16 U.S.C. 3831(e)) is amended by striking paragraphs (2) and (3) and inserting the following new paragraph:

(2)

Special rule for certain land

In the case of land devoted to hardwood trees, shelterbelts, windbreaks, or wildlife corridors under a contract entered into under this subchapter, the owner or operator of the land may, within the limitations prescribed under paragraph (1), specify the duration of the contract.

in paragraph (1), by striking watershed areas of the Chesapeake Bay Region, the Great Lakes Region, the Long Island Sound Region, and other;

(2)

in paragraph (2), by striking watersheds.—Watersheds and inserting areas.—Areas; and

(3)

in paragraph (3), by striking a watershed’s designation— and all that follows through the period at the end and inserting an area’s designation if the Secretary finds that the area no longer contains actual and significant adverse water quality or habitat impacts related to agricultural production activities..

Section 1231B(b)(1)(B) of the Food Security Act of 1985 (16 U.S.C. 3831b(b)(1)(B)) is amended by striking flow from a row crop agriculture drainage system and inserting surface and subsurface flow from row crop agricultural production.

(c)

Acreage limitation

Section 1231B(c)(1)(B) of the Food Security Act of 1985 (16 U.S.C. 3831b(c)(1)(B)) is amended by striking 1,000,000 and inserting 750,000.

(d)

Clerical amendment

The heading of section 1231B of the Food Security Act of 1985 (16 U.S.C. 3831b) is amended to read as follows: Farmable wetland program.

2003.

Duties of owners and operators

(a)

Limitation on harvesting, grazing, or commercial use of forage

Section 1232(a)(8) of the Food Security Act of 1985 (16 U.S.C. 3832(a)(8)) is amended by striking except that and all that follows through the semicolon at the end of the paragraph and inserting except as provided in subsection (b) or (c) of section 1233;.

(b)

Conservation plan requirements

Subsection (b) of section 1232 of the Food Security Act of 1985 (16 U.S.C. 3832) is amended to read as follows:

(b)

Conservation plans

The plan referred to in subsection (a)(1) shall set forth—

(1)

the conservation measures and practices to be carried out by the owner or operator during the term of the contract; and

(2)

the commercial use, if any, to be permitted on the land during the term.

Section 1233 of the Food Security Act of 1985 (16 U.S.C. 3833) is amended to read as follows:

1233.

Duties of the Secretary

(a)

Cost-share and rental payments

In return for a contract entered into by an owner or operator under the conservation reserve program, the Secretary shall—

(1)

share the cost of carrying out the conservation measures and practices set forth in the contract for which the Secretary determines that cost sharing is appropriate and in the public interest; and

(2)

for a period of years not in excess of the term of the contract, pay an annual rental payment in an amount necessary to compensate for—

(A)

the conversion of highly erodible cropland or other eligible lands normally devoted to the production of an agricultural commodity on a farm or ranch to a less intensive use;

(B)

the retirement of any base history that the owner or operator agrees to retire permanently; and

(C)

the development and management of grasslands for multiple natural resource conservation benefits, including to soil, water, air, and wildlife.

(b)

Specified activities permitted

The Secretary shall permit certain activities or commercial uses of land that is subject to a contract under the conservation reserve program in a manner that is consistent with a plan approved by the Secretary, as follows:

(1)

Harvesting, grazing, or other commercial use of the forage in response to a drought or other emergency created by a natural disaster, without any reduction in the rental rate.

(2)

Consistent with the conservation of soil, water quality, and wildlife habitat (including habitat during nesting seasons for birds in the area), and in exchange for a reduction of not less than 25 percent in the annual rental rate for the acres covered by the authorized activity—

(A)

managed harvesting and other commercial use (including the managed harvesting of biomass), except that in permitting managed harvesting, the Secretary, in coordination with the State technical committee—

(i)

shall develop appropriate vegetation management requirements; and

(ii)

shall identify periods during which managed harvesting may be conducted, such that the frequency is not more than once every three years;

(B)

routine grazing or prescribed grazing for the control of invasive species, except that in permitting such routine grazing or prescribed grazing, the Secretary, in coordination with the State technical committee—

(i)

shall develop appropriate vegetation management requirements and stocking rates for the land that are suitable for continued routine grazing; and

(ii)

shall identify the periods during which routine grazing may be conducted, such that the frequency is not more than once every two years, taking into consideration regional differences such as—

(I)

climate, soil type, and natural resources;

(II)

the number of years that should be required between routine grazing activities; and

(III)

how often during a year in which routine grazing is permitted that routine grazing should be allowed to occur; and

(C)

the installation of wind turbines and associated access, except that in permitting the installation of wind turbines, the Secretary shall determine the number and location of wind turbines that may be installed, taking into account—

(i)

the location, size, and other physical characteristics of the land;

(ii)

the extent to which the land contains wildlife and wildlife habitat; and

(iii)

the purposes of the conservation reserve program under this subchapter.

(3)

The intermittent and seasonal use of vegetative buffer practices incidental to agricultural production on lands adjacent to the buffer such that the permitted use does not destroy the permanent vegetative cover.

(c)

Authorized activities on grasslands

For eligible land described in section 1231(b)(3), the Secretary shall permit the following activities:

(1)

Common grazing practices, including maintenance and necessary cultural practices, on the land in a manner that is consistent with maintaining the viability of grassland, forb, and shrub species appropriate to that locality.

(2)

Haying, mowing, or harvesting for seed production, subject to appropriate restrictions during the nesting season for critical bird species in the area.

Beginning on the date that is 1 year before the date of termination of a contract under the program, the Secretary shall allow an owner or operator to make conservation and land improvements that facilitate maintaining protection of enrolled land after expiration of the contract.

(2)

Conservation plan

The Secretary shall require an owner or operator carrying out the activities described in paragraph (1) to develop and implement a conservation plan.

(3)

Re-enrollment prohibited

Land improved under paragraph (1) may not be re-enrolled in the conservation reserve program for 5 years after the date of termination of the contract.

in paragraph (1), by inserting or other eligible lands after highly erodible cropland both places it appears; and

(2)

by striking paragraph (2) and inserting the following new paragraph:

(2)

Methods of Determination

(A)

In general

The amounts payable to owners or operators in the form of rental payments under contracts entered into under this subchapter may be determined through—

(i)

the submission of bids for such contracts by owners and operators in such manner as the Secretary may prescribe; or

(ii)

such other means as the Secretary determines are appropriate.

(B)

Grasslands

In the case of eligible land described in section 1231(b)(3), the Secretary shall make annual payments in an amount that is not more than 75 percent of the grazing value of the land covered by the contract.

.

(c)

Payment schedule

Subsection (d) of section 1234 of the Food Security Act of 1985 (16 U.S.C. 3834) is amended to read as follows:

(d)

Payment schedule

(1)

In general

Except as otherwise provided in this section, payments under this subchapter shall be made in cash in such amount and on such time schedule as is agreed on and specified in the contract.

(2)

Advance payment

Payments under this subchapter may be made in advance of determination of performance.

in the matter preceding subparagraph (A), by striking Duties and all that follows through a beginning farmer and inserting Transition to covered farmer or rancher.—In the case of a contract modification approved in order to facilitate the transfer of land subject to a contract from a retired farmer or rancher to a beginning farmer;

(B)

in subparagraph (A)(i), by inserting , including preparing to plant an agricultural crop after improvements;

(C)

in subparagraph (D), by striking the farmer or rancher and inserting the covered farmer or rancher; and

(D)

in subparagraph (E), by striking section 1001A(b)(3)(B) and inserting section 1001; and

(2)

in paragraph (2), by striking requirement of section 1231(h)(4)(B) and inserting option pursuant to section 1234(c)(2)(A)(ii).

(c)

Final year contract

Section 1235 of the Food Security Act of 1985 (16 U.S.C. 3835) is amended by adding at the end the following new subsections:

(g)

Final year of contract

The Secretary shall not consider an owner or operator to be in violation of a term or condition of the conservation reserve contract if—

(1)

during the year prior to expiration of the contract, the land is enrolled in the conservation stewardship program; and

(2)

the activity required under the conservation stewardship program pursuant to such enrollment is consistent with this subchapter.

(h)

Land enrolled in agricultural conservation easement program

The Secretary may terminate or modify a contract entered into under this subchapter if eligible land that is subject to such contract is transferred into the agricultural conservation easement program under subtitle H.

The amendments made by this subtitle shall take effect on October 1, 2013, except the amendment made by section 2001(d), which shall take effect on the date of the enactment of this Act.

(b)

Effect on existing contracts

(1)

In general

Except as provided in paragraph (2), the amendments made by this subtitle shall not affect the validity or terms of any contract entered into by the Secretary of Agriculture under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) before October 1, 2013, or any payments required to be made in connection with the contract.

(2)

Updating of existing contracts

The Secretary shall permit an owner or operator of land subject to a contract entered into under subchapter B of chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) before October 1, 2013, to update the contract to reflect the activities and uses of land under contract permitted under the terms and conditions of section 1233(b) of that Act (as amended by section 2004), as determined appropriate by the Secretary.

B

Conservation Stewardship Program

2101.

Conservation stewardship program

(a)

Revision of current program

Subchapter B of chapter 2 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3838d et seq.) is amended to read as follows:

B

Conservation stewardship program

1238D.

Definitions

In this subchapter:

(1)

Agricultural operation

The term agricultural operation means all eligible land, whether or not contiguous, that is—

(A)

under the effective control of a producer at the time the producer enters into a contract under the program; and

(B)

operated with equipment, labor, management, and production or cultivation practices that are substantially separate from other agricultural operations, as determined by the Secretary.

Subject to paragraph (2), the following land (even if covered by the definition of eligible land) is not eligible for enrollment in the program:

(A)

Land enrolled in the conservation reserve program, unless—

(i)

the conservation reserve contract will expire at the end of the fiscal year in which the land is to be enrolled in the program; and

(ii)

conservation reserve program payments for land enrolled in the program cease before the first program payment is made to the applicant under this subchapter.

(B)

Land enrolled in a wetland easement through the agricultural conservation easement program.

(C)

Land enrolled in the conservation security program.

(2)

Conversion to cropland

Eligible land used for crop production after October 1, 2013, that had not been planted, considered to be planted, or devoted to crop production for at least 4 of the 6 years preceding that date shall not be the basis for any payment under the program, unless the land does not meet the requirement because—

(A)

the land had previously been enrolled in the conservation reserve program;

(B)

the land has been maintained using long-term crop rotation practices, as determined by the Secretary; or

(C)

the land is incidental land needed for efficient operation of the farm or ranch, as determined by the Secretary.

1238F.

Stewardship contracts

(a)

Submission of contract offers

To be eligible to participate in the conservation stewardship program, a producer shall submit to the Secretary a contract offer for the agricultural operation that—

(1)

demonstrates to the satisfaction of the Secretary that the producer, at the time of the contract offer, meets or exceeds the stewardship threshold for at least 2 priority resource concerns; and

(2)

would, at a minimum, meet or exceed the stewardship threshold for at least 1 additional priority resource concern by the end of the stewardship contract by—

(A)

installing and adopting additional conservation activities; and

(B)

improving, maintaining, and managing existing conservation activities across the entire agricultural operation in a manner that increases or extends the conservation benefits in place at the time the contract offer is accepted by the Secretary.

the level of conservation treatment on all applicable priority resource concerns at the time of application;

(B)

the degree to which the proposed conservation activities effectively increase conservation performance;

(C)

the number of applicable priority resource concerns proposed to be treated to meet or exceed the stewardship threshold by the end of the contract;

(D)

the extent to which other priority resource concerns will be addressed to meet or exceed the stewardship threshold by the end of the contract period;

(E)

the extent to which the actual and anticipated conservation benefits from the contract are provided at the least cost relative to other similarly beneficial contract offers; and

(F)

the extent to which priority resource concerns will be addressed when transitioning from the conservation reserve program to agricultural production.

(2)

Prohibition

The Secretary may not assign a higher priority to any application because the applicant is willing to accept a lower payment than the applicant would otherwise be eligible to receive.

(3)

Additional criteria

The Secretary may develop and use such additional criteria that the Secretary determines are necessary to ensure that national, State, and local priority resource concerns are effectively addressed.

(c)

Entering into contracts

After a determination that a producer is eligible for the program under subsection (a), and a determination that the contract offer ranks sufficiently high under the evaluation criteria under subsection (b), the Secretary shall enter into a conservation stewardship contract with the producer to enroll the eligible land to be covered by the contract.

(d)

Contract provisions

(1)

Term

A conservation stewardship contract shall be for a term of 5 years.

(2)

Required provisions

The conservation stewardship contract of a producer shall—

(A)

state the amount of the payment the Secretary agrees to make to the producer for each year of the conservation stewardship contract under section 1238G(d);

(B)

require the producer—

(i)

to implement a conservation stewardship plan that describes the program purposes to be achieved through 1 or more conservation activities;

(ii)

to maintain and supply information as required by the Secretary to determine compliance with the conservation stewardship plan and any other requirements of the program; and

(iii)

not to conduct any activities on the agricultural operation that would tend to defeat the purposes of the program;

(C)

permit all economic uses of the eligible land that—

(i)

maintain the agricultural nature of the land; and

(ii)

are consistent with the conservation purposes of the conservation stewardship contract;

(D)

include a provision to ensure that a producer shall not be considered in violation of the contract for failure to comply with the contract due to circumstances beyond the control of the producer, including a disaster or related condition, as determined by the Secretary;

(E)

include provisions requiring that upon the violation of a term or condition of the contract at any time the producer has control of the land—

(i)

if the Secretary determines that the violation warrants termination of the contract—

(I)

the producer shall forfeit all rights to receive payments under the contract; and

(II)

the producer shall refund all or a portion of the payments received by the producer under the contract, including any interest on the payments, as determined by the Secretary; or

(ii)

if the Secretary determines that the violation does not warrant termination of the contract, the producer shall refund or accept adjustments to the payments provided to the producer, as the Secretary determines to be appropriate;

(F)

include provisions in accordance with paragraphs (3) and (4) of this section; and

(G)

include any additional provisions the Secretary determines are necessary to carry out the program.

(3)

Change of interest in land subject to a contract

(A)

In general

At the time of application, a producer shall have control of the eligible land to be enrolled in the program. Except as provided in subparagraph (B), a change in the interest of a producer in eligible land covered by a contract under the program shall result in the termination of the contract with regard to that land.

(B)

Transfer of duties and rights

Subparagraph (A) shall not apply if—

(i)

within a reasonable period of time (as determined by the Secretary) after the date of the change in the interest in eligible land covered by a contract under the program, the transferee of the land provides written notice to the Secretary that all duties and rights under the contract have been transferred to, and assumed by, the transferee for the portion of the land transferred;

(ii)

the transferee meets the eligibility requirements of the program; and

(iii)

the Secretary approves the transfer of all duties and rights under the contract.

(4)

Modification and termination of contracts

(A)

Voluntary modification or termination

The Secretary may modify or terminate a contract with a producer if—

(i)

the producer agrees to the modification or termination; and

(ii)

the Secretary determines that the modification or termination is in the public interest.

(B)

Involuntary termination

The Secretary may terminate a contract if the Secretary determines that the producer violated the contract.

(5)

Repayment

If a contract is terminated, the Secretary may, consistent with the purposes of the program—

(A)

allow the producer to retain payments already received under the contract; or

(B)

require repayment, in whole or in part, of payments received and assess liquidated damages.

(e)

Contract renewal

At the end of the initial 5-year contract period, the Secretary may allow the producer to renew the contract for 1 additional 5-year period if the producer—

(1)

demonstrates compliance with the terms of the initial contract;

(2)

agrees to adopt and continue to integrate conservation activities across the entire agricultural operation, as determined by the Secretary; and

(3)

agrees, by the end of the contract period—

(A)

to meet the stewardship threshold of at least two additional priority resource concerns on the agricultural operation; or

(B)

to exceed the stewardship threshold of two existing priority resource concerns that are specified by the Secretary in the initial contract.

1238G.

Duties of the secretary

(a)

In general

To achieve the conservation goals of a contract under the conservation stewardship program, the Secretary shall—

(1)

make the program available to eligible producers on a continuous enrollment basis with 1 or more ranking periods, one of which shall occur in the first quarter of each fiscal year;

(2)

identify not less than 5 priority resource concerns in a particular watershed or other appropriate region or area within a State; and

primarily on each State’s proportion of eligible land to the total acreage of eligible land in all States; and

(2)

also on consideration of—

(A)

the extent and magnitude of the conservation needs associated with agricultural production in each State;

(B)

the degree to which implementation of the program in the State is, or will be, effective in helping producers address those needs; and

(C)

other considerations to achieve equitable geographic distribution of funds, as determined by the Secretary.

(c)

Acreage enrollment limitation

During the period beginning on October 1, 2013, and ending on September 30, 2021, the Secretary shall, to the maximum extent practicable—

(1)

enroll in the program an additional 8,695,000 acres for each fiscal year; and

(2)

manage the program to achieve a national average rate of $18 per acre, which shall include the costs of all financial assistance, technical assistance, and any other expenses associated with enrollment or participation in the program.

(d)

Conservation stewardship payments

(1)

Availability of payments

The Secretary shall provide annual payments under the program to compensate the producer for—

(A)

installing and adopting additional conservation activities; and

(B)

improving, maintaining, and managing conservation activities in place at the agricultural operation of the producer at the time the contract offer is accepted by the Secretary.

(2)

Payment amount

The amount of the conservation stewardship annual payment shall be determined by the Secretary and based, to the maximum extent practicable, on the following factors:

The extent to which priority resource concerns will be addressed through the installation and adoption of conservation activities on the agricultural operation.

(E)

The level of stewardship in place at the time of application and maintained over the term of the contract.

(F)

The degree to which the conservation activities will be integrated across the entire agricultural operation for all applicable priority resource concerns over the term of the contract.

(G)

Such other factors as determined appropriate by the Secretary.

(3)

Exclusions

A payment to a producer under this subsection shall not be provided for—

(A)

the design, construction, or maintenance of animal waste storage or treatment facilities or associated waste transport or transfer devices for animal feeding operations; or

(B)

conservation activities for which there is no cost incurred or income forgone to the producer.

(4)

Delivery of payments

In making payments under this subsection, the Secretary shall, to the extent practicable—

(A)

prorate conservation performance over the term of the contract so as to accommodate, to the extent practicable, producers earning equal annual payments in each fiscal year; and

(B)

make payments as soon as practicable after October 1 of each fiscal year for activities carried out in the previous fiscal year.

(e)

Supplemental payments for resource-conserving crop rotations

(1)

Availability of payments

The Secretary shall provide additional payments to producers that, in participating in the program, agree to adopt or improve resource-conserving crop rotations to achieve beneficial crop rotations as appropriate for the eligible land of the producers.

(2)

Beneficial crop rotations

The Secretary shall determine whether a resource-conserving crop rotation is a beneficial crop rotation eligible for additional payments under paragraph (1) based on whether the resource-conserving crop rotation is designed to provide natural resource conservation and production benefits.

(3)

Eligibility

To be eligible to receive a payment described in paragraph (1), a producer shall agree to adopt and maintain beneficial resource-conserving crop rotations for the term of the contract.

(4)

Resource-conserving crop rotation

In this subsection, the term resource-conserving crop rotation means a crop rotation that—

(A)

includes at least 1 resource conserving crop (as defined by the Secretary);

(B)

reduces erosion;

(C)

improves soil fertility and tilth;

(D)

interrupts pest cycles; and

(E)

in applicable areas, reduces depletion of soil moisture or otherwise reduces the need for irrigation.

(f)

Payment limitations

A person or legal entity may not receive, directly or indirectly, payments under the program that, in the aggregate, exceed $200,000 under all contracts entered into during fiscal years 2013 through 2017, excluding funding arrangements with Indian tribes, regardless of the number of contracts entered into under the program by the person or legal entity.

(g)

Specialty crop and organic producers

The Secretary shall ensure that outreach and technical assistance are available, and program specifications are appropriate to enable specialty crop and organic producers to participate in the program.

(h)

Coordination with organic certification

The Secretary shall establish a transparent means by which producers may initiate organic certification under the Organic Foods Production Act of 1990 (7 U.S.C. 6501 et seq.) while participating in a contract under the program.

(i)

Regulations

The Secretary shall promulgate regulations that—

(1)

prescribe such other rules as the Secretary determines to be necessary to ensure a fair and reasonable application of the limitations established under subsection (f); and

(2)

otherwise enable the Secretary to carry out the program.

.

(b)

Effective date

The amendment made by this section shall take effect on October 1, 2013.

(c)

Effect on existing contracts

(1)

In general

The amendment made by this section shall not affect the validity or terms of any contract entered into by the Secretary of Agriculture under subchapter B of chapter 2 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3838d et seq.) before October 1, 2013, or any payments required to be made in connection with the contract.

(2)

Conservation stewardship program

Funds made available under section 1241(a)(4) of the Food Security Act of 1985 (16 U.S.C. 3841(a)(4)) (as amended by section 2601(a) of this title) may be used to administer and make payments to program participants that enrolled into contracts during any of fiscal years 2009 through 2013.

in subsection (b), by striking paragraph (2) and inserting the following new paragraph:

(2)

Term

A contract under the program shall have a term that does not exceed 10 years.

;

(3)

in subsection (d)(4)—

(A)

in subparagraph (A), in the matter preceding clause (i), by inserting , veteran farmer or rancher (as defined in section 2501(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e))), before or a beginning farmer or rancher; and

(B)

by striking subparagraph (B) and inserting the following new subparagraph:

(B)

Advance payments

(i)

In general

Not more than 50 percent of the amount determined under subparagraph (A) may be provided in advance for the purpose of purchasing materials or contracting.

(ii)

Return of funds

If funds provided in advance are not expended during the 90-day period beginning on the date of receipt of the funds, the funds shall be returned within a reasonable time frame, as determined by the Secretary.

;

(4)

by striking subsection (f) and inserting the following new subsection:

(f)

Allocation of funding

(1)

Livestock

For each of fiscal years 2014 through 2018, at least 60 percent of the funds made available for payments under the program shall be targeted at practices relating to livestock production.

(2)

Wildlife habitat

For each of fiscal years 2014 through 2018, 5 percent of the funds made available for payments under the program shall be targeted at practices benefitting wildlife habitat.

;

(5)

in subsection (g)—

(A)

in the subsection heading, by striking Federally Recognized Native American Indian Tribes and Alaska Native Corporations and inserting Indian Tribes;

(B)

by striking federally recognized Native American Indian Tribes and Alaska Native Corporations (including their affiliated membership organizations) and inserting Indian tribes; and

(C)

by striking or Native Corporation; and

(6)

by adding at the end the following:

(j)

Wildlife habitat incentive practice

The Secretary shall provide payments under the program for conservation practices that support the restoration, development, and improvement of wildlife habitat on eligible land, including—

(1)

upland wildlife habitat;

(2)

wetland wildlife habitat;

(3)

habitat for threatened and endangered species;

(4)

fish habitat;

(5)

habitat on pivot corners and other irregular areas of a field; and

(6)

other types of wildlife habitat, as determined appropriate by the Secretary.

in paragraph (1), by striking environmental and inserting conservation; and

(2)

in paragraph (3), by striking purpose of the environmental quality incentives program specified in section 1240(1) and inserting purposes of the program.

2204.

Duties of producers

Section 1240D(2) of the Food Security Act of 1985 (16 U.S.C. 3839aa–4(2)) is amended by striking farm, ranch, or forest and inserting enrolled.

2205.

Limitation on payments

Section 1240G of the Food Security Act of 1985 (16 U.S.C. 3839aa–7) is amended to read as follows:

1240G.

Limitation on payments

A person or legal entity may not receive, directly or indirectly, cost share or incentive payments under this chapter that, in aggregate, exceed $450,000 for all contracts entered into under this chapter by the person or legal entity during the period of fiscal years 2014 through 2018, regardless of the number of contracts entered into under this chapter by the person or legal entity.

in subparagraph (D), by striking the period and inserting a semicolon; and

(C)

by adding at the end the following new subparagraphs:

(E)

facilitate on-farm conservation research and demonstration activities; and

(F)

facilitate pilot testing of new technologies or innovative conservation practices.

; and

(2)

by striking subsection (b) and inserting the following new subsection:

(b)

Reporting

Not later than December 31, 2014, and every two years thereafter, the Secretary shall submit to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives a report on the status of projects funded under this section, including—

(1)

funding awarded;

(2)

project results; and

(3)

incorporation of project findings, such as new technology and innovative approaches, into the conservation efforts implemented by the Secretary.

.

2207.

Effective date

(a)

In general

The amendments made by this subtitle shall take effect on October 1, 2013.

(b)

Effect on existing contracts

The amendments made by this subtitle shall not affect the validity or terms of any contract entered into by the Secretary of Agriculture under chapter 4 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.) before October 1, 2013, or any payments required to be made in connection with the contract.

D

Agricultural Conservation Easement Program

2301.

Agricultural conservation easement program

(a)

Establishment

Title XII of the Food Security Act of 1985 is amended by adding at the end the following new subtitle:

H

Agricultural Conservation Easement Program

1265.

Establishment and purposes

(a)

Establishment

The Secretary shall establish an agricultural conservation easement program for the conservation of eligible land and natural resources through easements or other interests in land.

(b)

Purposes

The purposes of the program are to—

(1)

combine the purposes and coordinate the functions of the wetlands reserve program established under section 1237, the grassland reserve program established under section 1238N, and the farmland protection program established under section 1238I, as such sections were in effect on September 30, 2013;

(2)

restore, protect, and enhance wetlands on eligible land;

(3)

protect the agricultural use and related conservation values of eligible land by limiting nonagricultural uses of that land; and

The term agricultural land easement means an easement or other interest in eligible land that—

(A)

is conveyed for the purpose of protecting natural resources and the agricultural nature of the land; and

(B)

permits the landowner the right to continue agricultural production and related uses subject to an agricultural land easement plan, as approved by the Secretary.

(2)

Eligible entity

The term eligible entity means—

(A)

an agency of State or local government or an Indian tribe (including a farmland protection board or land resource council established under State law); or

(B)

an organization that is—

(i)

organized for, and at all times since the formation of the organization has been operated principally for, 1 or more of the conservation purposes specified in clause (i), (ii), (iii), or (iv) of section 170(h)(4)(A) of the Internal Revenue Code of 1986;

(ii)

an organization described in section 501(c)(3) of that Code that is exempt from taxation under section 501(a) of that Code; or

(iii)

described in—

(I)

paragraph (1) or (2) of section 509(a) of that Code; or

(II)

section 509(a)(3) of that Code and is controlled by an organization described in section 509(a)(2) of that Code.

(3)

Eligible land

The term eligible land means private or tribal land that is—

(A)

in the case of an agricultural land easement, agricultural land, including land on a farm or ranch—

(i)

that is subject to a pending offer for purchase of an agricultural land easement from an eligible entity;

(ii)

that—

(I)

has prime, unique, or other productive soil;

(II)

contains historical or archaeological resources; or

(III)

the protection of which will further a State or local policy consistent with the purposes of the program; and

(iii)

that is—

(I)

cropland;

(II)

rangeland;

(III)

grassland or land that contains forbs, or shrubland for which grazing is the predominate use;

(IV)

pastureland; or

(V)

nonindustrial private forest land that contributes to the economic viability of an offered parcel or serves as a buffer to protect such land from development;

(B)

in the case of a wetland easement, a wetland or related area, including—

(i)

farmed or converted wetlands, together with adjacent land that is functionally dependent on that land, if the Secretary determines it—

(I)

is likely to be successfully restored in a cost effective manner; and

(II)

will maximize the wildlife benefits and wetland functions and values, as determined by the Secretary in consultation with the Secretary of the Interior at the local level;

(ii)

cropland or grassland that was used for agricultural production prior to flooding from the natural overflow of—

(I)

a closed basin lake and adjacent land that is functionally dependent upon it, if the State or other entity is willing to provide 50 percent share of the cost of an easement;

(II)

a pothole and adjacent land that is functionally dependent on it;

(iii)

farmed wetlands and adjoining lands that—

(I)

are enrolled in the conservation reserve program;

(II)

have the highest wetland functions and values, as determined by the Secretary; and

(III)

are likely to return to production after they leave the conservation reserve program;

(iv)

riparian areas that link wetlands that are protected by easements or some other device that achieves the same purpose as an easement; or

(v)

other wetlands of an owner that would not otherwise be eligible, if the Secretary determines that the inclusion of such wetlands in a wetland easement would significantly add to the functional value of the easement; or

(C)

in the case of either an agricultural land easement or wetland easement, other land that is incidental to land described in subparagraph (A) or (B), if the Secretary determines that it is necessary for the efficient administration of the easements under this program.

(4)

Program

The term program means the agricultural conservation easement program established by this subtitle.

(5)

Wetland easement

The term wetland easement means a reserved interest in eligible land that—

(A)

is defined and delineated in a deed; and

(B)

stipulates—

(i)

the rights, title, and interests in land conveyed to the Secretary; and

(ii)

the rights, title, and interests in land that are reserved to the landowner.

1265B.

Agricultural land easements

(a)

Availability of assistance

The Secretary shall facilitate and provide funding for—

(1)

the purchase by eligible entities of agricultural land easements and other interests in eligible land; and

(2)

technical assistance to provide for the conservation of natural resources pursuant to an agricultural land easement plan.

(b)

Cost-share assistance

(1)

In general

The Secretary shall protect the agricultural use, including grazing, and related conservation values of eligible land through cost-share assistance to eligible entities for purchasing agricultural land easements.

(2)

Scope of assistance available

(A)

Federal share

An agreement described in paragraph (4) shall provide for a Federal share determined by the Secretary of an amount not to exceed 50 percent of the fair market value of the agricultural land easement or other interest in land, as determined by the Secretary using—

(i)

the Uniform Standards of Professional Appraisal Practice;

(ii)

an area-wide market analysis or survey; or

(iii)

another industry-approved method.

(B)

Non-federal share

(i)

In general

Under the agreement, the eligible entity shall provide a share that is at least equivalent to that provided by the Secretary.

(ii)

Source of contribution

An eligible entity may include as part of its share a charitable donation or qualified conservation contribution (as defined by section 170(h) of the Internal Revenue Code of 1986) from the private landowner if the eligible entity contributes its own cash resources in an amount that is at least 50 percent of the amount contributed by the Secretary.

(C)

Exception

In the case of grassland of special environmental significance, as determined by the Secretary, the Secretary may provide an amount not to exceed 75 percent of the fair market value of the agricultural land easement.

(3)

Evaluation and ranking of applications

(A)

Criteria

The Secretary shall establish evaluation and ranking criteria to maximize the benefit of Federal investment under the program.

(B)

Considerations

In establishing the criteria, the Secretary shall emphasize support for—

(i)

protecting agricultural uses and related conservation values of the land; and

(ii)

maximizing the protection of areas devoted to agricultural use.

(C)

Bidding down

If the Secretary determines that 2 or more applications for cost-share assistance are comparable in achieving the purpose of the program, the Secretary shall not assign a higher priority to any of those applications solely on the basis of lesser cost to the program.

(4)

Agreements with eligible entities

(A)

In general

The Secretary shall enter into agreements with eligible entities to stipulate the terms and conditions under which the eligible entity is permitted to use cost-share assistance provided under this section.

(B)

Length of agreements

An agreement shall be for a term that is—

(i)

in the case of an eligible entity certified under the process described in paragraph (5), a minimum of five years; and

(ii)

for all other eligible entities, at least three, but not more than five years.

(C)

Minimum terms and conditions

An eligible entity shall be authorized to use its own terms and conditions for agricultural land easements so long as the Secretary determines such terms and conditions—

(i)

are consistent with the purposes of the program;

(ii)

permit effective enforcement of the conservation purposes of such easements;

(iii)

include a right of enforcement for the Secretary, that may be used only if the terms of the easement are not enforced by the holder of the easement;

(iv)

subject the land in which an interest is purchased to an agricultural land easement plan that—

(I)

describes the activities which promote the long-term viability of the land to meet the purposes for which the easement was acquired;

(II)

requires the management of grasslands according to a grasslands management plan; and

(III)

includes a conservation plan, where appropriate, and requires, at the option of the Secretary, the conversion of highly erodible cropland to less intensive uses; and

(v)

include a limit on the impervious surfaces to be allowed that is consistent with the agricultural activities to be conducted.

(D)

Substitution of qualified projects

An agreement shall allow, upon mutual agreement of the parties, substitution of qualified projects that are identified at the time of the proposed substitution.

(E)

Effect of violation

If a violation occurs of a term or condition of an agreement under this subsection—

(i)

the Secretary may terminate the agreement; and

(ii)

the Secretary may require the eligible entity to refund all or part of any payments received by the entity under the program, with interest on the payments as determined appropriate by the Secretary.

(5)

Certification of eligible entities

(A)

Certification process

The Secretary shall establish a process under which the Secretary may—

(i)

directly certify eligible entities that meet established criteria;

(ii)

enter into long-term agreements with certified eligible entities; and

(iii)

accept proposals for cost-share assistance for the purchase of agricultural land easements throughout the duration of such agreements.

(B)

Certification criteria

In order to be certified, an eligible entity shall demonstrate to the Secretary that the entity will maintain, at a minimum, for the duration of the agreement—

(i)

a plan for administering easements that is consistent with the purpose of this subtitle;

(ii)

the capacity and resources to monitor and enforce agricultural land easements; and

(iii)

policies and procedures to ensure—

(I)

the long-term integrity of agricultural land easements on eligible land;

(II)

timely completion of acquisitions of such easements; and

(III)

timely and complete evaluation and reporting to the Secretary on the use of funds provided under the program.

(C)

Review and revision

(i)

Review

The Secretary shall conduct a review of eligible entities certified under subparagraph (A) every three years to ensure that such entities are meeting the criteria established under subparagraph (B).

(ii)

Revocation

If the Secretary finds that the certified eligible entity no longer meets the criteria established under subparagraph (B), the Secretary may—

(I)

allow the certified eligible entity a specified period of time, at a minimum 180 days, in which to take such actions as may be necessary to meet the criteria; and

(II)

revoke the certification of the eligible entity, if after the specified period of time, the certified eligible entity does not meet such criteria.

(c)

Method of enrollment

The Secretary shall enroll eligible land under this section through the use of—

(1)

permanent easements; or

(2)

easements for the maximum duration allowed under applicable State laws.

(d)

Technical assistance

The Secretary may provide technical assistance, if requested, to assist in—

(1)

compliance with the terms and conditions of easements; and

(2)

implementation of an agricultural land easement plan.

1265C.

Wetland easements

(a)

Availability of assistance

The Secretary shall provide assistance to owners of eligible land to restore, protect, and enhance wetlands through—

(1)

wetland easements and related wetland easement plans; and

(2)

technical assistance.

(b)

Easements

(1)

Method of enrollment

The Secretary shall enroll eligible land under this section through the use of—

(A)

30-year easements;

(B)

permanent easements;

(C)

easements for the maximum duration allowed under applicable State laws; or

(D)

as an option for Indian tribes only, 30-year contracts (which shall be considered to be 30-year easements for the purposes of this subtitle).

(2)

Limitations

(A)

Ineligible land

The Secretary may not acquire easements on—

(i)

land established to trees under the conservation reserve program, except in cases where the Secretary determines it would further the purposes of the program; and

(ii)

farmed wetlands or converted wetlands where the conversion was not commenced prior to December 23, 1985.

(B)

Changes in ownership

No wetland easement shall be created on land that has changed ownership during the preceding 24-month period unless—

(i)

the new ownership was acquired by will or succession as a result of the death of the previous owner;

(ii)(I)

the ownership change occurred because of foreclosure on the land; and

(II)

immediately before the foreclosure, the owner of the land exercises a right of redemption from the mortgage holder in accordance with State law; or

(iii)

the Secretary determines that the land was acquired under circumstances that give adequate assurances that such land was not acquired for the purposes of placing it in the program.

(3)

Evaluation and ranking of offers

(A)

Criteria

The Secretary shall establish evaluation and ranking criteria to maximize the benefit of Federal investment under the program.

(B)

Considerations

When evaluating offers from landowners, the Secretary may consider—

(i)

the conservation benefits of obtaining a wetland easement, including the potential environmental benefits if the land was removed from agricultural production;

(ii)

the cost-effectiveness of each wetland easement, so as to maximize the environmental benefits per dollar expended;

(iii)

whether the landowner or another person is offering to contribute financially to the cost of the wetland easement to leverage Federal funds; and

(iv)

such other factors as the Secretary determines are necessary to carry out the purposes of the program.

(C)

Priority

The Secretary shall place priority on acquiring wetland easements based on the value of the wetland easement for protecting and enhancing habitat for migratory birds and other wildlife.

(4)

Agreement

To be eligible to place eligible land into the program through a wetland easement, the owner of such land shall enter into an agreement with the Secretary to—

(A)

grant an easement on such land to the Secretary;

(B)

authorize the implementation of a wetland easement plan developed for the eligible land under subsection (f);

(C)

create and record an appropriate deed restriction in accordance with applicable State law to reflect the easement agreed to;

(D)

provide a written statement of consent to such easement signed by those holding a security interest in the land;

(E)

comply with the terms and conditions of the easement and any related agreements; and

(F)

permanently retire any existing base history for the land on which the easement has been obtained.

(5)

Terms and conditions of easement

(A)

In general

A wetland easement shall include terms and conditions that—

(i)

permit—

(I)

repairs, improvements, and inspections on the land that are necessary to maintain existing public drainage systems; and

(II)

owners to control public access on the easement areas while identifying access routes to be used for restoration activities and management and easement monitoring;

(ii)

prohibit—

(I)

the alteration of wildlife habitat and other natural features of such land, unless specifically authorized by the Secretary;

(II)

the spraying of such land with chemicals or the mowing of such land, except where such spraying or mowing is authorized by the Secretary or is necessary—

(aa)

to comply with Federal or State noxious weed control laws;

(bb)

to comply with a Federal or State emergency pest treatment program; or

(cc)

to meet habitat needs of specific wildlife species;

(III)

any activities to be carried out on the owner’s or successor’s land that is immediately adjacent to, and functionally related to, the land that is subject to the easement if such activities will alter, degrade, or otherwise diminish the functional value of the eligible land; and

(IV)

the adoption of any other practice that would tend to defeat the purposes of the program, as determined by the Secretary;

(iii)

provide for the efficient and effective establishment of wildlife functions and values; and

(iv)

include such additional provisions as the Secretary determines are desirable to carry out the program or facilitate the practical administration thereof.

(B)

Violation

On the violation of the terms or conditions of a wetland easement, the wetland easement shall remain in force and the Secretary may require the owner to refund all or part of any payments received by the owner under the program, together with interest thereon as determined appropriate by the Secretary.

(C)

Compatible uses

Land subject to a wetland easement may be used for compatible economic uses, including such activities as hunting and fishing, managed timber harvest, or periodic haying or grazing, if such use is specifically permitted by the wetland easement plan developed for the land under subsection (f) and is consistent with the long-term protection and enhancement of the wetland resources for which the easement was established.

(D)

Reservation of grazing rights

The Secretary may include in the terms and conditions of a wetland easement a provision under which the owner reserves grazing rights if—

(i)

the Secretary determines that the reservation and use of the grazing rights—

(I)

is compatible with the land subject to the easement;

(II)

is consistent with the historical natural uses of the land and the long-term protection and enhancement goals for which the easement was established; and

(III)

complies with the wetland easement plan developed for the land under subsection (f); and

(ii)

the agreement provides for a commensurate reduction in the easement payment to account for the grazing value, as determined by the Secretary.

(6)

Compensation

(A)

Determination

(i)

Permanent easements

The Secretary shall pay as compensation for a permanent wetland easement acquired under the program an amount necessary to encourage enrollment in the program, based on the lowest of—

(I)

the fair market value of the land, as determined by the Secretary, using the Uniform Standards of Professional Appraisal Practice or an area-wide market analysis or survey;

(II)

the amount corresponding to a geographical cap, as determined by the Secretary in regulations; or

(III)

the offer made by the landowner.

(ii)

30-year easements

Compensation for a 30-year wetland easement shall be not less than 50 percent, but not more than 75 percent, of the compensation that would be paid for a permanent wetland easement.

(B)

Form of payment

Compensation for a wetland easement shall be provided by the Secretary in the form of a cash payment, in an amount determined under subparagraph (A).

(C)

Payment schedule

(i)

Easements valued at $500,000 or less

For wetland easements valued at $500,000 or less, the Secretary may provide easement payments in not more than 10 annual payments.

(ii)

Easements valued at more than $500,000

For wetland easements valued at more than $500,000, the Secretary may provide easement payments in at least 5, but not more than 10 annual payments, except that, if the Secretary determines it would further the purposes of the program, the Secretary may make a lump sum payment for such an easement.

(c)

Easement restoration

(1)

In general

The Secretary shall provide financial assistance to owners of eligible land to carry out the establishment of conservation measures and practices and protect wetland functions and values, including necessary maintenance activities, as set forth in a wetland easement plan developed for the eligible land under subsection (f).

(2)

Payments

The Secretary shall—

(A)

in the case of a permanent wetland easement, pay an amount that is not less than 75 percent, but not more than 100 percent, of the eligible costs, as determined by the Secretary; and

(B)

in the case of a 30-year wetland easement, pay an amount that is not less than 50 percent, but not more than 75 percent, of the eligible costs, as determined by the Secretary.

(d)

Technical assistance

(1)

In general

The Secretary shall assist owners in complying with the terms and conditions of wetland easements.

(2)

Contracts or agreements

The Secretary may enter into 1 or more contracts with private entities or agreements with a State, non-governmental organization, or Indian tribe to carry out necessary restoration, enhancement, or maintenance of a wetland easement if the Secretary determines that the contract or agreement will advance the purposes of the program.

(e)

Wetland enhancement option

The Secretary may enter into 1 or more agreements with a State (including a political subdivision or agency of a State), nongovernmental organization, or Indian tribe to carry out a special wetland enhancement option that the Secretary determines would advance the purposes of program.

(f)

Administration

(1)

Wetland easement plan

The Secretary shall develop a wetland easement plan for eligible lands subject to a wetland easement, which shall include practices and activities necessary to restore, protect, enhance, and maintain the enrolled lands.

(2)

Delegation of easement administration

The Secretary may delegate—

(A)

any of the easement management, monitoring, and enforcement responsibilities of the Secretary to other Federal or State agencies that have the appropriate authority, expertise, and resources necessary to carry out such delegated responsibilities; and

(B)

any of the easement management responsibilities of the Secretary to other conservation organizations if the Secretary determines the organization has the appropriate expertise and resources.

(3)

Payments

(A)

Timing of payments

The Secretary shall provide payment for obligations incurred by the Secretary under this section—

(i)

with respect to any easement restoration obligation under subsection (c), as soon as possible after the obligation is incurred; and

(ii)

with respect to any annual easement payment obligation incurred by the Secretary, as soon as possible after October 1 of each calendar year.

(B)

Payments to others

If an owner who is entitled to a payment under this section dies, becomes incompetent, is otherwise unable to receive such payment, or is succeeded by another person or entity who renders or completes the required performance, the Secretary shall make such payment, in accordance with regulations prescribed by the Secretary and without regard to any other provision of law, in such manner as the Secretary determines is fair and reasonable in light of all of the circumstances.

1265D.

Administration

(a)

Ineligible land

The Secretary may not use program funds for the purposes of acquiring an easement on—

(1)

lands owned by an agency of the United States, other than land held in trust for Indian tribes;

(2)

lands owned in fee title by a State, including an agency or a subdivision of a State, or a unit of local government;

(3)

land subject to an easement or deed restriction which, as determined by the Secretary, provides similar protection as would be provided by enrollment in the program; or

(4)

lands where the purposes of the program would be undermined due to on-site or off-site conditions, such as risk of hazardous substances, proposed or existing rights of way, infrastructure development, or adjacent land uses.

(b)

Priority

In evaluating applications under the program, the Secretary may give priority to land that is currently enrolled in the conservation reserve program in a contract that is set to expire within 1 year and—

(1)

in the case of an agricultural land easement, is grassland that would benefit from protection under a long-term easement; and

(2)

in the case of a wetland easement, is a wetland or related area with the highest functions and value and is likely to return to production after the land leaves the conservation reserve program.